How to invest in exchange-traded funds (ETFs) (2023)


  • What is an exchange traded fund?
  • How do ETFs work?
  • Who owns what?
  • Two types of ETFs
  • Buy and sell orders
  • What are the pros and cons of ETFs?
  • How can I invest in ETFs?
  • How much do ETFs cost?
  • What questions should I ask before buying an ETF?
  • What is an exchange-traded commodity (ETC)?

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Exchange-traded funds (ETFs) provide relatively low-cost exposure to a variety of markets and assets, such as stocks, bonds and commodities, through a single entry point, namely an ETF stock.

ETFs, which combine the characteristics of investing directly instocks and sharesand usinginvestment funds, have become increasingly popular. See why ETFs are worth considering, how to invest in them, and what to look out for when buying.

Please note: every investment is speculative, your capital is at risk and you may lose some or all of your money.

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What is an exchange traded fund?

An ETF allows investors to gain exposure to securities and commodity markets without requiring the usual stock-picking skills associated with selecting individual stocks or requiring in-depth knowledge about commodities such as precious metals or natural resources.

This is because ETFs focus less on individual trades and more on a collection of top investments in a particular market, industry sector or other tradable asset such as gold.

ETFs were developed during the 1990s and were first traded in London in 2000. Since then, they have received a lot of interest from investors around the world. According to data provider EPFR, over £7 trillion was invested globally in ETFs in 2021.

According to asset manager Wisdom Tree, more than a third of UK investors aged between 18 and 34 own ETFs.

How do ETFs work?

ETFs are "pool investments" that allow like-minded investors to pool their contributions and hand over responsibility for their money to a professional fund management company.

This company buys a basket of assets (stocks, bonds, etc.) to create the ETF. It then sells stocks that track the value of the ETF as determined by the performance of the underlying assets. These ETF shares can then be traded on the markets in the same way as conventional shares.

Who owns what?

Buying shares in an ETF does not mean that an investor owns a share of the underlying assets. Rather, it is the ETF manager who owns the assets and adjusts the number of associated ETF stocks to keep their price in sync with the value of the underlying assets or index.

Two types of ETFs

ETFs fall into two broad categories.

PhysicistETFs hold assets linked to the index in question and, like index tracker funds, replicate the index in its entirety (buying all stocks proportionally to the index profile) or rely on a technique called “sampling”.

(Video) How To Invest in ETFs | Ultimate Guide

based on exchangeorsyntheticETFs use financial instruments called derivatives to track an index or other benchmark in question. In this example, an ETF provides a basket of securities as collateral to a financial institution, such as a bank, in exchange for a swap contract.

The swap is the institution's guarantee to pay the required index return, in exchange for the performance of the guarantee. An ETF provider's website will indicate whether it offers physical or swap-based contracts.

Synthetically backed products can suffer losses if there are problems with the other companies involved in creating the tracking performance – that is, if they become insolvent, an investor may not receive the return due. This is known as counterparty risk.

Buy and sell orders

As with other types of stocks, it is possible to apply 'stop', 'limit' and 'open' orders when buying ETFs.

As their names suggest, these are instructions given to the broker or investment platform that kick in once certain prices are reached. They are designed to avoid unforeseen or unpleasant surprises for the would-be investor.

What are the pros and cons of ETFs?

ETFs are "passive" investments, so they aim to copy - not outperform - a given benchmark (such as a stock index) without the need for "active" asset selection.

This makes them cheaper to own than conventional 'active' funds with managers, supported by analysts, looking to make regular adjustments to the basket of securities under their responsibility.

This is important because the less investors are asked to pay in management fees, the more their contributions have the power to increase investment returns.

In addition to competitive fees (see below), ETFs also offer investors diversification. This helps them protect their holdings from stock market shocks by spreading money across different sectors.

Stock market indices contain tens, hundreds or even thousands of companies. Many ETFs provide exposure to a large number of these trades simultaneously, which is easier than pulling out many individual holdings to achieve the same effect.

Note that the diversification argument becomes less potent when the focus is on niche ETFs that are specially designed and focus only on a small part of the market or specific industry sector.

Although an ETF manager will try to keep his fund's investment performance in line with the indicated index, it is possible for so-called "tracking errors" to send the fund off course.

Tracking error can result from many sources, for example when a manager needs to switch assets in the ETF or make other changes so that the fund's holdings do not match the index. Hopefully this should be fixed over time.

How can I invest in ETFs?

If you use a financial advisor, it is possible that some of the underlying investments in your portfolio are made through ETFs.

You can check by reading the quarterly, semi-annual or annual updates you receive. A breakdown of fund types should be included along with their performance numbers.

Learn more here aboutfinancial advisorsincluding the different types, what they do, how to find one, and how much they charge.

Robotic advisors are a compromise between paying for full financial advice and deciding to do your investing yourself (see below). They offer another means of gaining exposure to ETFs, with a number of providers in this market offering access to a wide range of options.

You can read more here atour pick of the best robotic consultants.

The third and arguably most convenient way to buy ETFs is to do so online through a brokerage or through a smartphone trading app. Read our separate resources to learn more about setting up and funding investment platformorinvestment trading app.

How much do ETFs cost?

Investors purchasing ETFs through an investment platform will face a range of fees: an annual provider fund charge – charged as a percentage of the amount invested – plus platform provider fees, which come in various guises.

They can be charged "per transaction" or tied to the size of an investment portfolio. Annual fund charges for ETFs are relatively low, typically between 0.1% and 0.5%. A £1,000 investment in an ETF that charges 0.5% per annum would cost £5.


Generally speaking, investors will also have to pay a trading fee when buying or selling ETFs. This will normally range between £5 and £10 plus any annual platform fee charged by the provider in question.

It's possible to get started with a well-diversified portfolio for less than £100. But note that the unit price of ETFs varies considerably, from a few pounds to several hundred. This can be a determining factor in your eventual choice of investment.

When buying shares in companies listed on, say, the London Stock Exchange, investors incur a stamp duty fee of 0.5% on the transaction. But despite being traded on exchanges, ETFs are exempt from stamp duty in most jurisdictions, including the UK.

As with individual stocks and shares and other types of mutual funds, it is possible to hold ETFs within a tax-free product such as aindividual savings accountor ISA. The option for this route protects investors from paying income tax ondividendsorcapital gains taxon any profits.

What questions should I ask before buying an ETF?

Before signing up to a platform or app, it's worth considering what type of ETFs you want to buy, as the scale and variety of investments offered can vary from one provider to another. Charges (discussed above) can also vary from one provider to another.

In addition to the charges, it is worth checking whether the platform imposes a minimum deposit. If you plan to incorporate ETFs and other types of funds under one investment roof, double-check that your prospective provider offers access to as many of your investment preferences as possible.

Also check what level of help or customer service is provided should problems arise with managing your ETF portfolio and whether it is possible to enforce stop/loss instructions as mentioned above.

Before diving in, typical questions worth asking aspiring investors include whether they plan to follow global companies that make up a world stock market index, or whether their preference is for stocks from a particular country - such as those in the UK. or from the USA. .

If the focus is on businesses that operate in specific sectors, such as technology, energy or healthcare, it is important to choose a platform with access to the necessary ETFs.

As a general rule, the larger the ETF's assets under management – ​​a number that can be obtained from the product's online fact sheet – the more liquid it will be to trade.

Liquidity is a measure of how easily an investor can enter or exit an investment. The more liquidity there is, the smaller the spread between the "buy" price and the "ask" price of a fund.

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Fortunately, finding a suitable ETF from the plethora that now exist should be relatively straightforward. ETFs are designed around almost every type of security or asset available in the financial markets.

According to the London Stock Exchange, there are more than 1,500 ETFs listed on its main market, spanning around 50 issuers. Statista researchers say there are about 8,500 ETFs in circulation around the world.

For a selection of broad-based ETFs targeted at a variety of investor profiles and chosen by an investment expert, check out our article on our choice ofbest ETFs to buy.

Alternatively, if your focus is on gaining exposure to companies looking to outperform their rivals, as well as the broader market, read our article which provides our pick of thebest growth ETFs. For investors with a preference for fixed-income securities, we also cover our choice ofbest bond ETFs.

What is an exchange-traded commodity (ETC)?

ETCs are similar to ETFs, but instead of tracking stock market indices, they track the performance of commodities such as gold. The easiest way to do this is to keep the commodity in question in a tangible form – like gold bullion. This is known as "physical ETC".

An alternative approach is to rely on financial instruments, such as derivatives, to copy the rise and fall of a commodity's price. These are known as “synthetic ETCs”.

(Video) How To Invest In ETFs: Step-by-Step For Beginners


How to invest in exchange-traded funds (ETFs)? ›

Experts agree that for most personal investors, a portfolio comprising 5 to 10 ETFs is perfect in terms of diversification. But the number of ETFs is not what you should be looking at. Rather, you should consider the number of different sources of risk you are getting with those ETFs.

How do I invest in exchange-traded funds ETFs? ›

How to buy an ETF
  1. Open a brokerage account. You'll need a brokerage account to buy and sell securities like ETFs. ...
  2. Find and compare ETFs with screening tools. Now that you have your brokerage account, it's time to decide what ETFs to buy. ...
  3. Place the trade. ...
  4. Sit back and relax.
May 1, 2023

How many ETFs should I own as a beginner? ›

Experts agree that for most personal investors, a portfolio comprising 5 to 10 ETFs is perfect in terms of diversification. But the number of ETFs is not what you should be looking at. Rather, you should consider the number of different sources of risk you are getting with those ETFs.

How much of my portfolio should be in ETFs? ›

ETFs can provide an easy way to be diversified and as such, the investor may want to have 75% or more of the portfolio in ETFs." To that end, Conzo says a more sophisticated investor may have additional needs.

How do I choose an ETF for beginners? ›

Ultimately, investors choosing an ETF need to ask 3 questions: What exposure does this ETF have? How well does the ETF deliver this exposure? And how efficiently can I access the ETF? Look at the ETF's underlying index (benchmark) to determine the exposure you're getting.

Should beginners invest in ETFs? ›

Since they are easily traded on the stock market, ETFs that invest in assets like commodities or currencies can be an available vehicle for beginners looking for exposure to new or more advanced markets. One important characteristic of many (but not all) ETFs is that they're typically passively managed.

Which ETF has the highest return? ›

100 Highest 5 Year ETF Returns
SymbolName5-Year Return
XLKTechnology Select Sector SPDR Fund19.24%
QCLNFirst Trust NASDAQ Clean Edge Green Energy Index Fund19.15%
TQQQProShares UltraPro QQQ18.98%
VGTVanguard Information Technology ETF18.45%
91 more rows

How long should you hold an ETF? ›

Holding period:

If you hold ETF shares for one year or less, then gain is short-term capital gain. If you hold ETF shares for more than one year, then gain is long-term capital gain.

Is it okay to invest in only ETFs? ›

Should you invest in ETFs? Since ETFs offer built-in diversification and don't require large amounts of capital in order to invest in a range of stocks, they are a good way to get started. You can trade them like stocks while also enjoying a diversified portfolio.

What is the 3 ETF strategy? ›

A 3 fund portfolio is a diversification approach whereby the investors put their money in a certain ratio in three different asset classes, i.e., domestic stocks, domestic bonds, and international stocks. It is a simple, low-cost investing approach that ensures retirement savings at a minimal risk appetite.

How many S&P 500 ETFs should I buy? ›

You only need one S&P 500 ETF

All three of the ETFs listed here have lower-than-average expense ratios and offer an easy way to buy a slice of the U.S. stock market. You could be tempted to buy all three ETFs, but just one will do the trick.

What is the 4% rule for ETF? ›

How the 4% Rule Works. The 4% rule is easy to follow. In the first year of retirement, you can withdraw up to 4% of your portfolio's value. If you have $1 million saved for retirement, for example, you could spend $40,000 in the first year of retirement following the 4% rule.

What is the 5 rule of investing? ›

This sort of five percent rule is a yardstick to help investors with diversification and risk management. Using this strategy, no more than 1/20th of an investor's portfolio would be tied to any single security. This protects against material losses should that single company perform poorly or become insolvent.

What to consider before buying ETF? ›

The three things you want to look for are the fund's liquidity; its bid/ask spread; and its tendency to trade in line with its true net asset value. An ETF's liquidity stems from two sources: the liquidity of the fund itself; and the liquidity of its underlying shares.

What order type should I buy an ETF at? ›

Market orders are the simplest and represent the default order at most brokerages. It is simply an order to buy or sell an ETF at the best available price in the market at that moment. Pro: You can buy or sell as quickly as possible, because market orders prioritize speed of execution.

How do you know if an ETF is overpriced? ›

To determine if an ETF is overvalued, an investor can analyze the historical trend of the ETF's price and volume. If the price has risen rapidly in a short period and the volume is decreasing, it could indicate that the ETF is overvalued.

Is there a downside to ETFs? ›

Market risk

The single biggest risk in ETFs is market risk. Like a mutual fund or a closed-end fund, ETFs are only an investment vehicle—a wrapper for their underlying investment.

When should I put money into an ETF? ›

If you wait to buy an ETF until you are sure it will pay off for you, you'll probably pay a higher price. You are better off to buy sooner—when you are “pretty sure,” rather than “certain.” By the time you're sure an ETF is a good buy, many other investors may have come to share that opinion.

Can you make a living trading ETFs? ›

Some exchange-traded funds, or ETFs, can provide a potential income stream that may offer more diversification than investing in just one stock. Whether you're reorganizing your portfolio for your golden years or just starting to research income-oriented funds, you might want to consider this investment type.

What is the safest ETF to buy? ›

1. Vanguard S&P 500 ETF (VOO -0.16%) Legendary investor Warren Buffett has said that the best investment the average American can make is a low-cost S&P 500 index fund like the Vanguard S&P 500 ETF.

What is the fastest growing ETF? ›

Fastest Growing ETFs of 2023 (Starting AUM >$0)
TickerFundInflows (%)
QTJAInnovator Growth Accelerated Plus ETF - January540%
FSIGFirst Trust Limited Duration Investment Grade Corporate ETF488%
NVDLGraniteShares 1.5x Long NVDA Daily ETF472%
COWGPacer US Large Cap Cash Cows Growth Leaders ETF415%
16 more rows
Feb 28, 2023

What is the average annual return of an ETF? ›

In the last 30 Years, the Vanguard S&P 500 (VOO) ETF obtained a 9.80% compound annual return, with a 14.96% standard deviation. In 2022, the ETF granted a 1.37% dividend yield. If you are interested in getting periodic income, please refer to the Vanguard S&P 500 (VOO) ETF: Dividend Yield page.

What is the 7 day ETF rule? ›

Availability and Scope of the ETF Rule

maintain their exchange listing may no longer rely on the ETF Rule and must satisfy individual redemption requests within seven days pursuant to Section 22(e) of the 1940 Act or liquidate if not listed on an exchange. See ETF Release at 61.

Do you pay taxes on ETFs every year? ›

While ETFs are incredibly tax-efficient, that doesn't mean they're tax-free. They will pass on capital gains to their investors when the underlying assets perform well. This is referred to as a capital gains distribution.

Can you cash out ETFs? ›

An ETF may not be a suitable investment. You can't make automatic investments or withdrawals into or out of ETFs.

Are ETFs good for retirement? ›

Bottom Line. ETF benefits, including simplicity, low expenses and tax efficiency, make ETFs a worthwhile investment for retirement. Popular types of ETFs for retirement include dividend ETFs, fixed-income ETFs and real estate ETFs.

What are 3 disadvantages to owning an ETF over a mutual fund? ›

So it's important for any investor to understand the downside of ETFs.
  • Disadvantages of ETFs. ETF trading comes with some drawbacks, which include the following:
  • Trading fees. ...
  • Operating expenses. ...
  • Low trading volume. ...
  • Tracking errors. ...
  • Potentially less diversification. ...
  • Hidden risks. ...
  • Lack of liquidity.

What is a good balanced portfolio? ›

A balanced portfolio invests in both stocks and bonds to reduce potential volatility. An investor seeking a balanced portfolio is comfortable tolerating short-term price fluctuations, is willing to tolerate moderate growth, and has a mid- to long-range investment time horizon.

What is the number one traded ETF? ›

Most Popular ETFs: Top 100 ETFs By Trading Volume
SymbolNameAvg Daily Share Volume (3mo)
SPYSPDR S&P 500 ETF Trust89,171,695
SOXLDirexion Daily Semiconductor Bull 3x Shares74,188,359
BOILProShares Ultra Bloomberg Natural Gas68,839,992
UVXYProShares Ultra VIX Short-Term Futures ETF61,510,566
96 more rows

What is the most aggressive ETF? ›

Aggressive Growth ETF List
Symbol SymbolETF Name ETF NameESG Score Global Percentile (%) ESG Score Global Percentile (%)
VUGVanguard Growth ETF61.00%
IWFiShares Russell 1000 Growth ETF67.70%
VGTVanguard Information Technology ETF81.59%
XLKTechnology Select Sector SPDR Fund88.41%
4 more rows

Which ETF is most traded? ›

ProShares UltraPro QQQ is the most-popular and liquid ETF in the leveraged space, with AUM of $12 billion. ProShares UltraPro Short QQQ provides three times inverse exposure to the daily performance of the Nasdaq-100 Index, charging 95 bps in annual fees.

Does it make sense to buy multiple ETFs? ›

Diversifying across multiple asset classes with ETFs can reduce risk by spreading out investments over more than one sector or geographic region for those with long-term investment goals, such as retirement planning or college funding for children.

What is a good ETF fund size? ›

Level of Assets: To be considered a viable investment choice, an ETF should have a minimum level of assets, a common threshold being at least $10 million. An ETF with assets below this threshold is likely to have a limited degree of investor interest.

How much of my portfolio should be in S&P 500? ›

But the 5% rule can be broken if the investor is not aware of the fund's holdings. For example, a mutual fund investor can easily pass the 5% rule by investing in one of the best S&P 500 Index funds, because the total number of holdings is at least 500 stocks, each representing 1% or less of the fund's portfolio.

What is the 3 5 10 Rule for ETFs? ›

Specifically, a fund is prohibited from: acquiring more than 3% of a registered investment company's shares (the “3% Limit”); investing more than 5% of its assets in a single registered investment company (the “5% Limit”); or. investing more than 10% of its assets in registered investment companies (the “10% Limit”).

What is Rule 25 in investing? ›

The 25x Rule is simply an estimate of how much you'll need to have saved for retirement. You take the amount you want to spend each year in retirement and multiply it by 25. Generally, you can look at your current salary to get an idea of how much you might be able to comfortably live off in retirement.

What is the 5 10 40 Rule ETF? ›

No single asset can represent more than 10% of the fund's assets; holdings of more than 5% cannot in aggregate exceed 40% of the fund's assets. This is known as the "5/10/40" rule.

What is the 70% rule investing? ›

Basically, the rule says real estate investors should pay no more than 70% of a property's after-repair value (ARV) minus the cost of the repairs necessary to renovate the home. The ARV of a property is the amount a home could sell for after flippers renovate it.

What is Warren Buffett's number 1 rule? ›

Warren Buffett once said, “The first rule of an investment is don't lose [money]. And the second rule of an investment is don't forget the first rule. And that's all the rules there are.”

What is 10 10 10 investment rule? ›

Instead of asking yourself how you'll feel about buying something 10 minutes later, Grishman suggests that, unless you're bleeding and in the pharmacy asking for peroxide and bandages, you should actually wait 10 minutes to make the purchase. "The first TEN is a pause button. Wait, stop, don't buy this right now.

What time of year is best to invest in ETF? ›

"Around September or October, the investor can buy the major market index ETFs: SPDR Dow Jones industrial average ETF (ticker: DIA), SPDR S&P 500 (SPY), PowerShares QQQ (QQQ) and iShares Russell 2000 (IWM). And then sell them around the April to May time frame, especially after a nice run-up," Hirsch says.

What ETFs should be in your portfolio? ›

The Best Large-Cap U.S. Stock ETFs
Fund NameTickerAnnualized 5-Year Total Return %
iShares Core S&P Total US Stock Mkt ETFITOT8.65
Schwab US Broad Market ETF™SCHB8.70
Schwab US Large-Cap ETF™SCHX9.14
SPDR® Port S&P 1500 Comps Stk Mkt ETFSPTM9.22
10 more rows
Feb 27, 2023

What is a good ETF to buy and hold? ›

12 Best ETFS To Buy For 2023
  • Vanguard Total Stock Market ETF (VTI VTI -0.8% ) ...
  • Vanguard Dividend Appreciation ETF (VIG VIG +0.3% ) ...
  • Vanguard High Dividend Yield ETF (VYM VYM +1.3% ) ...
  • Invesco IVZ -1.5% S&P SmallCap Value with Momentum ETF (XSVM XSVM +0.3% ) ...
  • Invesco Russell 1000 Dynamic Multifactor ETF (OMFL OMFL -0.2% )
Apr 18, 2023

How do I directly invest in an ETF? ›

ETF transactions are carried out on the stock exchange where they are listed. Investors must have a trading account with a broker and a demat account, to be able to invest.

Is it better to buy a single stock or ETF? ›

A single stock can potentially return a lot more than an ETF, where you receive the weighted average performance of the holdings. Stocks can pay dividends, and over time those dividends can rise, as the top companies increase their payouts. Companies can be acquired at a substantial premium to the current stock price.

What is a good balance of ETFs? ›

A conservative balanced fund might allocate 35% to bond ETFs and 65% to stock ETFs, for example. Some may also invest in other asset classes, or deploy a variable allocation that changes over time.

What is the minimum investment in an ETF? ›

What's the minimum investment? Because they trade like stocks, ETFs do not require a minimum initial investment and are purchased as whole shares. You can buy an ETF for the price of just one share, usually referred to as the ETF's "market price."

How much does it cost to buy an ETF? ›

Also known as ETF transaction fees or ETF transaction costs, these may range from $8 to $30 at brokerage firms. Trading commissions are charged per trade, so they can add up if investors buy and sell a lot—and they're usually more expensive when an order is placed in person or over the phone.

Can I just invest in ETFs? ›

ETFs don't have minimum investment requirements -- at least not in the same sense that mutual funds do. However, ETFs trade on a per-share basis, so unless your broker offers the ability to buy fractional shares of stock, you'll need at least the current price of one share to get started.

Can we buy ETF directly? ›

In general, the process is like buying a stock. Fund your account. You'll need to transfer cash into your brokerage account to buy your ETF shares. Search for the ETF ticker symbol: If you're using one of your brokerage's research tools, you may be able to purchase shares directly from the ETF's entry.

Is an ETF better than a stock? ›

Advantages of investing in ETFs

ETFs tend to be less volatile than individual stocks, meaning your investment won't swing in value as much. The best ETFs have low expense ratios, the fund's cost as a percentage of your investment. The best may charge only a few dollars annually for every $10,000 invested.

How to invest in Vanguard ETF? ›

How do I buy an ETF or stock?
  1. Access trade form. Within the My Accounts tab, navigate to Buy & Sell. ...
  2. Account selection. If you have more than one account, you'll need to select an account. ...
  3. Select security. Select Buy. ...
  4. Enter share amount. ...
  5. Additional order details. ...
  6. Review trade details. ...
  7. Preview order. ...
  8. Confirmation & next steps.

Why is ETF not a good investment? ›

And remember, actively trading ETFs, as with stocks, can reduce your investment performance with commissions quickly piling up. Every ETF will also come with an expense ratio. The expense ratio is a measure of what percentage of a fund's total assets are required to cover various operating expenses each year.

Are ETFs for beginners? ›

Exchange traded funds (ETFs) are ideal for beginner investors due to their many benefits such as low expense ratios, abundant liquidity, range of investment choices, diversification, low investment threshold, and so on.

Do you need a broker for ETF? ›

You need a brokerage account to invest in ETFs (exchange-traded funds).

Can I invest in ETF without a broker? ›

ETFs are bought and sold just like regular stocks, so you'll need to choose an online broker before you are able to invest. $0 brokerage on global shares including US, UK and Japan markets.

What is the disadvantage of ETF? ›

So it's important for any investor to understand the downside of ETFs.
  • Disadvantages of ETFs. ETF trading comes with some drawbacks, which include the following:
  • Trading fees. ...
  • Operating expenses. ...
  • Low trading volume. ...
  • Tracking errors. ...
  • Potentially less diversification. ...
  • Hidden risks. ...
  • Lack of liquidity.

Do ETF pay dividends? ›

There are 2 basic types of dividends issued to investors of ETFs: qualified and non-qualified dividends. If you own shares of an exchange-traded fund (ETF), you may receive distributions in the form of dividends. These may be paid monthly or at some other interval, depending on the ETF.

What is Vanguard's best performing ETF? ›

Best Diversified ETF: Vanguard Total Stock Market ETF (VTI)

The Vanguard Total Stock Market ETF tracks the performance of the overall U.S. stock market. A large-blend ETF, it currently offers returns over 8%, making it one of the best-performing stocks on this list.

Who is better Vanguard or Fidelity? ›

While Vanguard stands out with its suite of funds, the brokerage is more limited when it comes to other offerings. However, it does allow investors to trade individual stocks and bonds. Conversely, Fidelity allows clients to invest in individual stocks, bonds, ETFs, options, mutual funds and more.

What is the minimum to buy an ETF on Vanguard? ›

Minimums & account balances

You can buy a Vanguard ETF for as little as $1.


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