Advantages of Vanguard ETFs
Vanguard has a highly competitive selection of ETFs available for purchase at numerous investment brokers’ platforms with some ETFs being commission-free. Vanguard ETFs typically use a passive investment approach and follow a particular stock or bond index. Because of superior investment sampling methodology, Vanguard ETFs are known for their low turnover ratios, low tracking errors and low expense ratios. Based on available data as of Dec. 31, 2014, the Vanguard average ETF expense ratio was 0.13%, which is significantly below the ETF industry’s average expense ratio of 0.55%.
Unlike mutual funds, Vanguard ETFs do not have any minimum investment requirements because their shares are traded and treated as any other stock. Investors can purchase a minimum of one share of any Vanguard ETF through their investment brokers.
Different Types of Vanguard ETFs
Vanguard offers different categories of ETFs that broadly specialize in investing in fixed-income securities or stocks. The majority of Vanguard ETFs invest in domestic stocks on U.S. equity markets, while the second-largest category of Vanguard ETFs is taxable bonds. There are also a few ETFs in the international stocks and specialty categories. The specialty category includes ETFs that track the performance of an industry or sector-specific index, such as energy, financials, health care and information technology.