VALLEY FORGE, Pa., Aug. 21, 2018 /PRNewswire/ -- Vanguard, the
leader in low-cost investing, today launched the largest suite of
commission-free ETFs available to investors.1 As
announced in early July, Vanguard is offering commission-free
online transactions on approximately 90% of all ETFs—nearly 1,800
of the roughly 2,000 ETFs currently trading on the major exchanges.
Vanguard has excluded inverse and leveraged ETFs due to their
highly speculative nature.
With a complex-wide average expense ratio of 0.11%, or one-fifth
the industry average2, Vanguard has led the industry on
lowering the cost and complexity of investing for more than four
decades, driving down the costs of funds, advice, and ETFs.
Vanguard pioneered index investing in 1976 and eliminated
commissions on its funds in 1977. The firm was an early entrant in
the ETF market, introducing its first ETF in 2001 and eliminating
commissions on its products in 2010. Now, Vanguard Brokerage
clients will be able to access the vast majority of ETFs—from
providers including BlackRock, Schwab, and SSgA—without incurring
additional costs to purchase or sell.
"Vanguard's expanded commission-free platform offers value,
access, and convenience to the increasing number of investors
turning to ETFs as their preferred investment vehicle," said
Karin Risi, Managing Director of
Vanguard's Retail Investor Group. "Ownership of Vanguard ETFs has
quadrupled in the last five years and ETFs are being held by a
broad range of investors—from millennials to retirees."
In an environment where some financial firms are curtailing
access to leading ETFs, Vanguard's expanded commission-free
platform will result in lower costs for initial ETF investments as
well as strategies such as dollar-cost averaging, rebalancing, and
harvesting losses for tax purposes. While ETFs offer the
flexibility to be bought and sold throughout the day, Vanguard
strongly cautions investors from trading excessively and chasing
hot performers.
"Our goal is to provide additional access and flexibility to our
clients, not spur counter-productive, frequent trading activity,"
said Ms. Risi. "It is encouraging that our research on trading
behavior indicates that our clients are adhering to Vanguard's
investment principles and buying and holding ETFs as part of
balanced, long-term portfolios."
Vanguard Brokerage accounts have zero minimums and zero account
fees for investors who establish electronic delivery of statements
and other materials. Investors enjoy commission-free transactions
on Vanguard's 77 low-cost ETFs, including some of the industry's
largest funds such as the $101.8
billion Vanguard Total Stock Market ETF (VTI), the
$94.8 billion Vanguard 500 ETF (VOO),
and the $36.4 billion Vanguard Total
Bond Market ETF (BND). Vanguard is the second largest provider of
ETFs with $968.1 billion in global
assets under management.
Vanguard Brokerage clients also have the opportunity to invest
in the more than 2,500 non-Vanguard mutual funds with no
transaction fees, and buy individual stocks and bonds, with many
investors paying between $0-$2 for online
equity transactions.
Settlement accounts are another advantage of a Vanguard
Brokerage Account. Unlike its competitors offering lower-yielding
sweep accounts, Vanguard's settlement accounts are allocated to the
Vanguard Federal Money Market Fund (VMFXX) 3, which
currently yields 1.82%—more than five times the average market
rate.4
Vanguard encourages investors to consider the all-in costs of
their relationship with an investment provider, including the
explicit costs of investing in index and active funds,
paying commissions on stocks and ETFs, and receiving advice, as
well as the opportunity costs associated with lower-yielding money
market accounts and lower after-tax returns.
Improving Investor Experience and Education
Vanguard continues to invest additional resources to enhance its
online experience and trading capabilities. Vanguard offers an
interactive tool that enables investors to compare ETFs, including
pre- and post-tax returns, expense ratios, and other data. Vanguard
also offers a five-point checklist of factors to consider beyond
cost when evaluating ETFs and other information for investors who
want to learn more about ETFs.
About Vanguard
Vanguard is one of the world's largest investment management
companies. As of July 31, 2018,
Vanguard managed more than $5.2
trillion in global assets. The firm, headquartered in
Valley Forge, Pennsylvania, offers
more than 400 funds to its more than 20 million investors
worldwide. For more information, visit vanguard.com.
All asset figures are as of July 31,
2018.
For more information about Vanguard funds, visit
vanguard.com/fundprospectus or call 800-997-2798 to obtain a
prospectus or, if available, a summary prospectus. Investment
objectives, risks, charges, expenses, and other important
information about a fund are contained in the prospectus; read and
consider it carefully before investing.
Vanguard ETF Shares are not redeemable with the issuing Fund
other than in very large aggregations worth millions of dollars.
Instead, investors must buy and sell Vanguard ETF Shares in the
secondary market and hold those shares in a brokerage account. In
doing so, the investor may incur brokerage commissions and may pay
more than net asset value when buying and receive less than net
asset value when selling.
All investing is subject to risk, including possible loss of
principal. Diversification does not ensure a profit or protect
against a loss.
1 Commission-free trading of Vanguard ETFs applies to
trades placed both online and by phone. Commission-free trading of
non-Vanguard ETFs excludes leveraged and inverse ETFs and applies
only to trades placed online; most clients will pay a commission to
buy or sell non-Vanguard ETFs by phone. Commission-free trading of
non-Vanguard ETFs also excludes 401(k) participants using the
Self-Directed Brokerage Option; see your plan's current commission
schedule. Vanguard Brokerage reserves the right to change the
non-Vanguard ETFs included in these offers at any time. All ETFs
are subject to management fees and expenses; refer to each ETF's
prospectus for more information. Account service fees may also
apply. All ETF sales are subject to a securities transaction fee.
See the Vanguard Brokerage Services commission and fee schedules
for full details.
2 Source: Morningstar, as of December 31, 2017.
3 You could lose money by investing in the Fund.
Although the Fund seeks to preserve the value of your investment at
$1.00 per share, it cannot guarantee
it will do so. An investment in the Fund is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any
other government agency. The Fund's sponsor has no legal obligation
to provide financial support to the Fund, and you should not expect
that the sponsor will provide financial support to the Fund at any
time.
4 Based on the highest published rates as of
June 29, 2018, for settlement
accounts at Charles Schwab, E*Trade, Fidelity, and TD Ameritrade,
which, with Vanguard, represent the five largest retail direct
brokerage providers.
Vanguard Brokerage Services is a division of Vanguard Marketing
Corporation, member FINRA and SIPC.
2018 The Vanguard Group, Inc. All rights reserved. Vanguard
Marketing Corporation, Distributor
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SOURCE Vanguard