Vanguard has announced reductions in the cost of investing with the firm by providing commission-free online transactions for the vast majority of exchange-traded funds (ETFs). The program will exclude highly speculative and complex ETFs, according to Vanguard.
Vanguard expects online transactions to be available in August and will include the majority of ETFs traded on the major exchanges.
“Vanguard wants to be the premier provider for long-term investors who want the flexibility to hold a wide array of low-cost funds and ETFs, coupled with the convenience of interacting with a single firm,” says Karin Risi, managing director of Vanguard’s Retail Investor Group. “Investors will be able to assemble balanced, diversified portfolios from virtually the full universe of ETFs to meet their financial goals, add additional assets regularly, and periodically rebalance—all without paying a commission.”
In February, Vanguard broadened its ETF family beyond index-based portfolios by introducing the firm’s first actively managed ETFs. Vanguard’s five single factor funds seek to achieve specific risk or return objectives through targeted factor exposures—minimum volatility, value, momentum, liquidity, and quality. The sixth ETF follows a multi-factor approach. Vanguard has also recently announced plans to introduce two new environmental, social and governance (ESG) ETFs, expected to launch in September of this year.
To help investors better understand ETFs, Vanguard has developed educational content and interactive tools on its website, including a “Compare ETFs” tool, enabling investors to conduct a side-by-side review of the expense ratios, portfolio characteristics, and other data of available ETFs.