Essential Guide: Understanding Vanguard ETFs and Index Funds

by | Jun 13, 2023 | Fidelity IRA | 19 comments

Essential Guide: Understanding Vanguard ETFs and Index Funds




The Vanguard Investment Group currently has around $7 trillion dollars in assets under management. Some of their investment options are index funds, ETFs, actively managed funds, and a whole lot more. Vanguard is currently the largest provider of mutual funds and the second-largest provider of exchange traded funds (ETFs) in the world behind Blackrock.

The reason why Vanguard is so unique in its investment approach isn’t so obvious to the average investor so I wanted to call a few of those reasons out.

In this video, we’ll go through some of the more unknown and eye-opening facts about the Vanguard investment group that might change how you view their investment options.

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Disclaimer: This video is for entertainment purposes only. Everyone’s situation is different so do your own research before making any decisions with your money. If you need help then contact a Certified Financial Fiduciary before trying anything that is mentioned in this video. I prefer a Fiduciary financial advisor that charges an hourly fee as opposed to an ongoing fee based on a % of your portfolio. Always remember that incentives determine the type of advice they give you so one that charges an hourly fee is less likely to be problematic.

#vanguard #ETFs #IndexFunds…(read more)


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Investing in the stock market can be a daunting task, one that many people shy away from. However, with the advent of exchange-traded funds (ETFs) and index funds, investing has become easier and more accessible to the average person. One of the most popular providers of these types of funds is Vanguard.

Vanguard is known for its low-cost investment options, such as its ETFs and index funds, which aim to track the performance of various indexes. An index is a group of stocks that are selected to represent a particular market or industry. For example, the S&P 500 index includes 500 large-cap American companies traded on the US stock market.

ETFs and index funds are both passive investments, meaning that they aim to replicate the performance of their chosen index rather than attempting to beat it. As a result, they tend to have lower fees than actively managed funds and can be a good option for long-term investors who want to take a more hands-off approach to investing.

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Vanguard offers a wide variety of ETFs and index funds, each with its own unique exposure and risk profile. Some of the more popular options include the Vanguard Total Stock Market ETF, which tracks the performance of the entire US stock market, and the Vanguard Total Bond Market ETF, which tracks the performance of the entire US bond market.

One of the benefits of investing in Vanguard ETFs and index funds is their low expense ratios. The expense ratio is the percentage of the fund’s assets that are used to cover the costs of operating the fund. Vanguard’s expense ratios are typically lower than those of its competitors, which can potentially increase returns over the long term.

Another benefit of investing in Vanguard ETFs and index funds is their diversification. The funds typically invest in a large number of stocks or bonds, providing exposure to a wide variety of companies or types of debt. This diversification can help reduce the risk of a single stock or bond negatively impacting the value of the entire portfolio.

While Vanguard ETFs and index funds can be a good option for long-term investors, it is important to consider the potential downsides. One potential drawback is the lack of flexibility compared to actively managed funds. Since the funds aim to replicate the performance of their chosen index, they may not be able to take advantage of certain market opportunities or avoid certain market risks.

Additionally, while Vanguard’s ETFs and index funds tend to have lower expense ratios than those of its competitors, they may still have fees that can erode returns over time. It is important to carefully consider the fees associated with each investment option before making a decision.

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In summary, Vanguard ETFs and index funds can be a good option for long-term investors who want to take a more passive approach to investing. With low fees, diversification, and the potential for long-term gains, these funds can be a great addition to a well-diversified investment portfolio. However, it is important to carefully consider the potential downsides and fees associated with each investment option before making a decision.

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19 Comments

  1. random269

    Index funds beat 75 percent of the managed fun, Vanguard has very low fees. Less than a percent. That is the thing I never like about managed funds, do they care about you?
    Vanguard has free trading ETFs. Have been very pleases with my experience, they give you a nice end of year statement. If you are an inexperienced investor go with index funds.
    Be aware that every time you sell a fund you may be liable for taxes. Index funds are not actively trade thus avoiding taxes.

  2. enny761

    Didn't Vanguard have funds in 1929?

  3. amagictouch

    They got 200 combinations
    Witch won is thee won that actually pays

  4. G. Moore

    Great vid. Bogle was a decent person. Greed is actually not good. Sorry Gordon Gekko.

  5. Ankit Singh

    Looks like the poor dog is f'ed with over 10k likes

  6. Frank O

    8:50 As Dave Ramsey says the type of person to win the lottery is the same type of person who wastes their money on the lottery, and that’s why they lose all their winnings.

  7. Allen Crossman

    I agree with you you especially the Royal Bank is bad, bad,bad

  8. gundahlyangachi

    The working poor will one day rise up and guillotine the billionaires of America, just like it happened in the French Revolution in the 1700s

  9. Tony Herrick

    I watched this video because during my companies investment securing round, I watched every business turn around and steal from my mind. Resulting in my competition doing only what I could do. I wonder if it has to deal with people's investment stocks dropping if something better hit the market?

    We're talking everything that could disrupt American finance… from tech companies to the food and beverage industry. Not to mention the main culprit, film and television.

    Yup, while people dig in trash cans, these people steal from our minds.

  10. Kyoto Ed

    Someone's plugging M1Finance…

  11. Connor Allan

    Performance matters more than fees

  12. Big Rich

    Great video! I have VTI and VOO and looking for my next fund.

  13. Mark Webber

    Had me until you had to diss blockchain and metaverse. what is the point of that?

  14. RedHawk

    Good content. I liked Vanguard's philosophy right from the start and I have been using Vanguard Funds consistently for decades. While I have done very well, over the last few years I have noticed that their service has fallen off and is no where near "best in class." Everything from the website to call center response time has deteriorated. Performance is still good and costs are still low, so maybe the declining service is merely a function of the fact tens of millions of other investors have now found them.

  15. walker b

    As a former employee I will tell you Vanguard is a terrible place to work!

  16. Mance

    Ahhh yes, feed the machine.

  17. Daniel

    Can you buy an index fund on an online brokerage or do you only buy ETFs that mirror index funds? If so, how do you buy actual index funds? Thanks

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