Finances,  Investing

Most Vanguard ETF trades will soon be free

The 56 Vanguard ETFs that are currently commission free are getting some new friends in August.

Vanguard announced today that they will expand their commission free ETF lineup. This expansion will include ETFs from a variety of competitors. As a result, in August, nearly 1800 ETFs will be commission free on Vanguard. This won’t include certain ETFs that are not seen as long term investing vehicles like leveraged or inverse ETFs.

That’s a big boost to the offerings today and another win for investors.

Vanguard customers today pay nothing for Vanguard ETFs and mutual funds. Now, they will pay nothing for a variety of other ETFs from competitors. The full list of options is still to come. However, it’s exciting to suddenly have a massive expansion of options available to me as a Vanguard account holder.

One of great recent developments in investing is the strong push towards low cost and no cost investing. Index fund expense ratios have gone down with Schwab, Fidelity, Ishares and Vanguard competing for investor dollars.

The popularity of indexing and Vanguard’s low cost approach has forced the hands of for profit brokers like Fidelity. This is a good thing for everyone except the for profit companies.

This move seems to be a continuation of that push. Fidelity already allows users to trade nearly 100 iShares ETFs for free. Schwab does the same with over 200 ETFs. None of those include the full Vanguard ETF lineup for free.

Now, starting in August, neither company will come close to Vanguard’s offering.

Vanguard already offers best in class index ETFs and mutual funds. Now, they’ve added another chip to their arsenal and have given investors who want additional options the best deal in the market.

That means other brokers will have to make changes or risk falling behind.

I use the iShares commission free ETF benefit in my Fidelity account. It’s easy to invest extra money there versus moving it to Vanguard. Additionally, some iShares offerings have lower fees than the corresponding Vanguard ETF.

However, that’s not always the case. That means having the ability to access all those funds in one account will be huge for me. It’ll be much easier to just fund my Vanguard account since that will have both options to choose from now.

I can just keep it all in Vanguard and have access to all ETFs without having to pay commission each time I want to trade. That’s a big deal because lazy investing is great and having one main account is simply easier.

I believe that’s what Vanguard is betting on here. They want to attract new investors by offering best in class costs and then offer them new services or move them into the Vanguard ETF suite.

That’s a good plan and since it means lower costs for me, it’s one I can get behind. It’s very nice to live in a time where investing is getting closer and closer to being essentially free.


  • Mike at Balanced Dividends

    I just saw this earlier today in the news – very interesting. We have a number of our funds held at Vanguard, but besides Acorns, we don’t currently utilize ETFs.

    Commission-free trading is a good thing though. As you mentioned, Vanguard has some of the best in class offerings, and this will make them even more of a valuable player in the industry.

    We currently utilize Robinhood for commission free trades, but this makes Vanguard appealing as well from a brokerage perspective.

    Now if they’d only have free (i.e., zero) expense ratios…

    Thanks for the post! – Mike

    • TimeintheMarket

      I’m on day 24 now and it’s rough going! I definitely should have started with the beginner version.

  • Dividend Portfolio

    My Roth IRA is currently at Vanguard. I just invest in the total stock market index fund and that’s it. At one point, I was looking at having a taxable brokerage account as well through Vanguard. However, I wasn’t keen on the idea of only having commission free Vanguard ETFs and funds and so I looked elsewhere. This is a nice option to have as a Vanguard customer. Now, if they have free commission trades on individual stocks and allow me to automatically invest in those stocks (giving me fractional shares), then I might consider moving from M1 Finance to Vanguard.

  • dividendgeek

    This is amazing news! I am super excited about the ETFs Vanguard will be offering. Hopefully, some NASDAQ ETFs i.e. QQQ. As of now I am very happy with Vanguard’s ETF offering.

    I am hope they don’t load up with high ER funds. Vanguard has a reputation to maintain … but 1800 is a lot of funds 🙂 Thanks for sharing.

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