Type: Dividend growth. Jim Rowley: And, you know, it was written off of a conversation I had with my dad; and he said, you know, he calls me Jimmy. All ETFs are subject to management fees and expenses; refer to each ETF's prospectus for more information. Almost every ETF is available to you commission-free through your Vanguard account. "So can you please discuss the relative cost over time of a fund versus an ETF?" Which one do I pay when I purchase, which one do I sell at, and how does this create cost?" Jim Rowley: A lot of moving parts in that question because I think the default has always been mutual funds because they've been around longer. This person is asking or has tweeted, I should say, "I am not a day trader. It's trading on exchange versus direct with the fund and it's trading at a market price rather than getting the end-of-day NAV. See the Vanguard Brokerage … There's rapid movement into and out of several funds in clear violation of the suggested holding periods specified in the funds' prospectuses. Vanguard funds may also impose purchase and redemption fees to help manage the flow of investment money. Dividend … And when you see the expense ratios, you see that given an indexing strategy, whether it's a mutual fund or an ETF, the expense ratios tend to be lower than they are for the nonindex strategies, whether it's an ETF or a mutual fund. But instead of breaking them down by ETF versus mutual fund, we break them down by index fund versus nonindex fund separated into ETF and mutual fund. Liz Tammaro: And similar to that question, we have another one that's come in from Bruce asking about how easy is it to buy and/or sell an ETF versus a mutual fund? Follow these tips to help you trade ETFs more successfully. Some funds charge a fee when you buy shares to offset the cost of certain securities. So, I forget the numbers used. When an ETF trades at a price that's higher than its net asset value (NAV), it's said to be at a premium. So it makes a lot of sense before we get started, let's define what is an ETF. However, this rule does not apply to: Vanguard money market and short-term bond funds (with the exception of Vanguard Short-Term Inflation-Protected Securities Index Fund). But maybe then to resummarize again is for those ETFs that are 40 Act funds, like we talked about, meaning they're subject to the same regulatory environment as mutual funds, you know, whether or not you as the investor generate capital gains because you're the one buying and selling the shares, right, number one. I think we have a chart that addresses that point that Doug was talking about that ETFs are overwhelming. Liz Tammaro: Another live question has come in. For example, if you had $10,000 invested in a fund with an expense ratio of 0.20%, you'd pay about $20 a year out of your investment returns. So they're not always attached to the fund. 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. A type of investment with characteristics of both mutual funds and individual stocks. See the … So, for example, less-risky investments like CDs (certificates of deposit) or savings accounts generally earn a low rate of return, and higher-risk investments like stocks generally earn a higher rate of return. Furthermore, and I should say providing some type of an investment exposure to those advisors, whether it's an index in particular or a market strategy. And we just addressed some of the similarities between ETFs and mutual funds, so it's maybe more important to know what are the actual differences. Price is not determined until stock … All funds, even the passively managed index funds, have expense ratios … To avoid buying the dividend and getting a tax surprise, you should check the capital gains and dividend distribution dates before buying mutual funds. And just because you can day trade it doesn't mean you have to day trade it. Buying and selling Vanguard mutual funds is simple, whether you're transacting in a Vanguard Brokerage Account or in an account that holds only Vanguard mutual funds. See the Vanguard Brokerage Services® commission and fee schedules for full details. When buying or selling an ETF, you will pay or receive the current market price, which may be more or less than net asset value. To management fees and expenses ; refer to each ETF 's can buy or sell via bank... Indexing in and of itself is a proportional stake in the secondary market with the fund family or Vanguard. 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