Vanguard ETF Trading - Review 2018

Last updated & tested: 28.10.2018

If traders enter the words “low-cost ETF trading” into the Google search box, they will see the Vanguard broker appear right at the top of the 1st Google page. Founded in 1975 by Jack Bogle, Vanguard is really the king of kings in terms of low-cost ETF trading. Not only is Vanguard famous for bringing to traders an amazing low-cost trading service with more than 1800 commission-free ETFs and 3000 fee-free mutual funds, but it’s also famous for offering a variety of financial assets and a rich education centre.

Highlights
  • Vanguard is the haven for low-cost ETF trading service
  • Vanguard clients can enjoy over 1800 commission-free ETFs and 3000 fee-free mutual funds
  • Vanguard has a rich education centre
  • Vanguard is one of the brokers that have consecutively won awards over the years
7.
of 14 ETF Broker
Vanguard
vanguard experiences
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Headquarters and regulation

USA (FINRA/SIPC)

Number of ETFs with discount

1800

Saving plans

Yes

Custody fee

$20

Trading from

$1

Mobile Trading & Apps

Demo account

No

Premiums

Yes

Minimum deposit

$ 1

Services & additional benefits

Hotline
E-mail

1. Trading Offer

1) Trading Offers: Various Asset Classes To Choose From

Vanguard offers traders lots of ETFs to select. This Vanguard ETF review found more than 2000 ETFs available for Vanguard clients, including 1800 commission-free ones. There are also various asset classes offered.

Below is the preliminary list of ETFs and asset classes provided by this broker:

U.S. bond ETFs

  • Treasury/Agency: Extended Duration Treasury ETF, Intermediate-Term Bond ETF, Intermediate-Term, Treasury ETF, Long-Term Bond ETF
  • Investment-grade: Intermediate-Term Corporate Bond ETF, Long-Term Corporate Bond ETF, Short-Term, Corporate Bond ETF, Total Corporate Bond ETF
  • Tax-exempt: Tax-Exempt Bond ETF

U.S. stock ETFs

  • Large-cap: Dividend Appreciation ETF, ESG U.S. Stock ETF, Growth ETF, High Dividend Yield ETF, Mega Cap ETF, Mega Cap Growth ETF
  • Mid-cap: Mid-Cap Value ETF, Extended Market ETF, Mid-Cap ETF
  • Small-cap: Small-Cap ETF, Small-Cap Growth ETF

International stock ETFs

  • Global: Total World Stock ETF
  • International: ESG International Stock ETF, FTSE All-World ex-US ETF, FTSE All-World ex-US Small-Cap ETF, FTSE Developed Markets ETF, FTSE Europe ETF                                
  • Emerging markets: FTSE Emerging Markets ETF

Sector & specialty ETFs: Communication Services ETF, Consumer Discretionary ETF, Consumer Staples ETF, Energy ETF, Financials ETF, Health Care ETF                

Traders can open custodial accounts at Vanguard. The annual fee charged by this broker for these accounts is $20.

Trader Rating
Vanguardreview_summary_group_1_image
  • Vanguard offers traders more than 2000 ETFs, including over 1800 commission-free ones
  • The broker provides traders with multiple asset classes.
  • Vanguard charges an annualized $20 for using custodial accounts
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Risk warning: Capital can be lost. Terms and conditions apply.
2. Costs

2) Exchanges and Trading Centres: There Are Not Only Domestic Exchanges

The main stock exchanges providing ETFs for Vanguard are the New York Stock Exchange (NYSE) and the NASDAQ. Besides, the broker also connects with exchanges outside the U.S. such as the London Stock Exchange (LSE), Shanghai Stock Exchange, Euronext, Australian Securities Exchange, Deutsche Börse, etc. This enables traders to have access to many different ETFs groups.

Trading ETFs at Vanguard can be done using online platforms or by phone with the assistance of a certified brokerage associate. Vanguard offers market participants 4 types of orders: Market, Limit, Stop, and Stop-limit. With advanced trading strategies, traders can call the broker directly and request a connection with a brokerage associate in order to discuss what other order types are available.

Vanguard claims that they have direct access to the markets. Therefore, in case traders place requests at the time a foreign exchange is closed, those requests will be logged and executed in the next time that exchange is open back.

Trader Rating
Vanguardreview_summary_group_2_image
  • The major exchanges providing ETFs for Vanguard are the New York Stock Exchange (NYSE) and the NASDAQ
  • The broker also connects with many foreign exchanges
  • Trading at Vanguard can be done using online platforms or by phone
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Risk warning: Capital can be lost. Terms and conditions apply.
3. Account

3) Trading Conditions: A Low-Cost ETF Trading Service

There are over 1,800 commission-free ETFs available for online traders at Vanguard.

With trades done by phone, the fees charged by the brokers depend on the investment amount of traders. The detailed information is as follows:

  • Less than $50,000 (Standard): $25 per trade
  • $50,000 to $500,000 (Voyager Services): $25 per trade
  • $500,000 to $1 million (Voyager Select Services): $20 per trade
  • $1 million to $5 million (Flagship Services): $0 for first 25 trades; $2 thereafter
  • $5 million or more (Flagship Select Services): $0 for first 100 trades; $2 thereafter

The fees charged by Vanguard on mutual fund trades are also competitive, with more than 3,000 fee-free and 6,000 low-cost mutual funds available for online traders. The starting fees are $20 per trade and down gradually based on traders’ investment amount.

With trades on other financial assets like stocks, options and bonds, the fees vary from $2 to $7 per trade. Vanguard offers 25 fee-free trades for traders with deposits from $1 million, and 100 fee-free trades for traders with deposits from $5 million.

The minimum savings plan at Vanguard is $1,000.

Trader Rating
Vanguardreview_summary_group_3_image
  • ETF trading fees charged by Vanguard are very low
  • The broker offers lots of commission-free ETFs and mutual funds for online traders
  • The bigger the deposits are, the lower the fees are
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Risk warning: Capital can be lost. Terms and conditions apply.
4. Platform

4) ETF Trading Platform & Mobile Trading: No Advanced Trading Platform

If traders are looking for advanced ETF trading platforms, they should consider trading with another broker instead of Vanguard. The reason is simple: this broker doesn’t offer anything close to a professional trading platform since the most popular way to place orders at Vanguard is using phone.

This broker, however, provides traders with a mobile trading platform compatible with iOS and Android devices. Trading on this platform is much cheaper compared to calling directly to the broker to place orders.

In terms of investment counting tools, Vanguard deserves a thumbs-up. This broker’s offered tools are quite comprehensive, giving both beginners and professionals a broad overview of the investment moves they are going to make.

Despite not having an advanced trading platform, Vanguard has an across-the-board trading centre. Here traders can really learn most aspects about investments, from the basics to advanced knowledge. Traders are also taught how to set a complete, efficient investment plan, and how to stick to it.

Trader Rating
Vanguardreview_summary_group_4_image
  • There is no advanced trading platform at Vanguard.
  • This broker does provide traders with a mobile trading platform where they can trade ETFs with low fees.
  • Vanguard has many useful investment counting tools and a comprehensive trading centre.
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Risk warning: Capital can be lost. Terms and conditions apply.
5. Usability

5) Usability of the Website: Very User-Friendly

Vanguard’s website is very neat and user-friendly, with the red and white being the main colours.

However, the broker’s homepage falls short as it doesn’t provide much useful information; there are only introductions to Vanguard Total World Bond ETF and their offered 1800 commission-free ETFs besides some other call-to-action buttons leading traders to read their blogs, partner with them, and open new trading accounts.

With that said, information about Vanguard’s products and services is fully provided within the menu bar. Moving the mouse onto the “Investing” tab, traders will have the broker’s investment products and offered types of accounts appear. For traders who care about investing goals and investment plans, they can find everything they need in the “Advice & Retirement” tab.

Laying at the top of the Vanguard website are 4 useful buttons: Open An Account, Forms, Contact Us, and Logon. This enables traders to easily access their account, make transactions, and contact Vanguard’s specialists in urgent cases.

The broker’s website is also optimized for mobile devices. No misalignment of banners, images and menus were found when we tested on prevalent browsers.

Trader Rating
Vanguardreview_summary_group_5_image
  • Vanguard’s website is neat and user-friendly.
  • Information about Vanguard’s products and services is fully provided within the menu bar.
  • The broker’s website is also optimized for mobile devices.
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Risk warning: Capital can be lost. Terms and conditions apply.
6. Support

6) Customer Support: Smart, Comprehensive, and Conscientious

Stepping into the “Contact Us” section of Vanguard, traders might be impressed by this broker’s support centre – a very smart, comprehensive, and conscientious one.

Vanguard provides traders with information to contact their specialists based on topics. Within each topic, there are lists of common questions that traders frequently meet, followed by answers. This arrangement deserves an A+ mark because it helps traders easily and quickly find correct answers to their questions. In case traders can’t find the relevant answers, they can immediately pick up their phones and call the broker following the contact information provided at the bottom of the topic.

Like any other brokers, Vanguard provides traders with 4 main contacting channels as follows:

Phone: the broker’s general helpdesk phone is 888-273-4205, which is available 24/5 from 8 a.m. to 10 p.m., Eastern time.

Email: To contact Vanguard specialists via email, traders must open trading accounts here.

Mail: Traders can mail to

  • By U.S. Mail

Vanguard

P.O. Box 1110

Valley Forge, PA 19482-1110

  • By registered, certified, or overnight mail

Vanguard

455 Devon Park Drive

Wayne, PA 19087-1815

Social Media: Traders can contact the broker via multiple social channels including Facebook, Google+, Youtube, Twitter, LinkedIn, Mobile App, etc.

Trader Rating
Vanguardreview_summary_group_6_image
  • Vanguard’s support centre is smart, comprehensive, and conscientious.
  • The broker provides traders with contact information based on topics.
  • There are 4 contacting channels offered: via Phone, email, mail, and social media.
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Risk warning: Capital can be lost. Terms and conditions apply.
7. Payment

7) Methods of Payment: Various Payment Methods

Funding to Vanguard trading accounts can be done using one of the 3 following payment methods:

Bank transfer: Traders can make deposits to their accounts by using bank transfer. They can set up options for periodic transfers or wire redemptions from banks to their Vanguard accounts. This method usually takes between 2-5 business days to complete. The broker claims that they charge no fee for electronic bank transfers and require no minimum deposit.

Credit/Debit cards: If traders prefer instant deposits, depositing using Credit/Debit cards is the right method for them. Vanguard also requires no minimum deposit with this transferring method.

Mailing a check: Traders can also fund to their Vanguard accounts by mailing a check. This method takes from 1 to 3 business days to clear. To make check deposits, traders will need to select the “Check” option in their accounts and follow Vanguard’s instructions.

In addition to the above-mentioned methods, traders can also move money from their other Vanguard accounts into their settlement funds if those accounts were registered under their name.

Trader Rating
Vanguardreview_summary_group_7_image
  • Vanguard provides traders with 3 depositing methods: Bank transfer, Credit/Debit cards, and Check
  • Bank transfer is the easiest method to put money into traders’ accounts.
  • Traders can also move money from their other Vanguard accounts into their settlement funds
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Risk warning: Capital can be lost. Terms and conditions apply.
8. Offers

8) Additional Offers: Fee-Free Trades and a Comprehensive Education Centre

Vanguard seems to highly take care of how traders will invest. Therefore, they have built a rich and comprehensive education centre laid in the Advice & Retirement tab.

Stepping into the broker’s education centre, traders will have access to many useful tools used to make an outlook about where traders’ financial plans will go to and how those plans help them in life. The broker separates investing goals into 3 categories: college, emergency fund, and other savings goals. Vanguard also provides traders with investment plans suitable for the age groups 20-49, 50-64, and 65+. This allows traders to easily find which plan is the most relevant to them.

Apart from financial counting tools, Vanguard clients can also access to a warehouse of financial knowledge from basic to advanced. Learning to become professional investors is at their fingertips.

In addition to a superior education centre, Vanguard also offers many liberal promotions for large depositors. Traders with deposits from $1 million can experience a fee-free trading service for the first 25 trades, while the number of fee-free trades for traders with deposits from $5 million is 100.

Trader Rating
Vanguardreview_summary_group_8_image
  • Vanguard offers traders a rich and comprehensive education centre.
  • Traders can have access to many useful counting tools and financial knowledge from basic to advanced.
  • Vanguard also offers fee-free trades for traders with large deposits.
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Risk warning: Capital can be lost. Terms and conditions apply.
9. Regulation

9) Licensing & Deposit Protection: Vanguard is a Member of FINRA/SIPC

Vanguard is a fully regulated broker. Brokerage assets are held by Vanguard Brokerage Services, a division of Vanguard Marketing Corporation, member of Financial Industry Regulatory Authority (FINRA) and Securities Investor Protection Corporation (SIPC). SIPC’s mission is to supervise the liquidation of member broker-dealers so in case Vanguard faces financial difficulties and customer assets are missing, this broker’s clients can enjoy a deposit protection of up to $500,000 for securities and cash (including $250,000 in cash only).

The website of Vanguard is encrypted by a 128bit Secure Socket Layer (SSL) encryption. This helps protect clients’ personal information like name, date of birth, credit card details, social security number, and passport from hackers.

Generally speaking, the trading environment at Vanguard is safe and secure. Traders can rest assured with their deposits and their personal information here.

Trader Rating
Vanguardreview_summary_group_9_image
  • Brokerage assets at Vanguard are held by Vanguard Brokerage Services, member of Financial Industry Regulatory Authority (FINRA) and Securities Investor Protection Corporation (SIPC).
  • Vanguard clients can enjoy a deposit protection of up to $500,000 for securities and cash (including $250,000 in cash only) in case of broker bankruptcy.
  • The website of Vanguard is encrypted by a 128bit Secure Socket Layer (SSL) encryption.
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Risk warning: Capital can be lost. Terms and conditions apply.
10. Awards

10) Awards: Vanguard is an Award-Winning Broker

Vanguard is one of the few brokers that have consistently won awards over the years.

In 2012, the broker was recognized as the “Fund Manager of the Year” by AFR Smart Investor Magazine. It was also named the 2012 Fixed Interest Fund Manager of the Year by Morning Star.

In 2013, Vanguard won multiple awards from Money Magazine:              Best ETF Provider, Best International Share ETF, Best International Share ETF, and Best Specialty ETF. In the same year, Vanguard also finished in first place in AFR Smart Investor League of Exceptional Service Survey.

2014 marked another successful year for Vanguard since they again achieved multiple awards from Money Magazine. At the same time, the broker was also recognized as the “ETF Provider of the Year” at the Money Management/Lonsec Fund Manager of the Year Awards.

2015 witnessed Vanguard win multiple achievements. Besides multiple “Best of the Best” awards the and “ETF Provider of the Year” title, the broker also won the “ETF Provider” award at the 2015 SMSF Adviser and two other awards from Morningstar.

In 2016 and 2017, Vanguard continued to gain many awards from Money Magazine thanks to their superior ETF services. It was also named the Fund Manager of the Year at the Financial Review Smart Investor Blue Ribbon Awards.

Trader Rating
Vanguardreview_summary_group_10_image
  • Vanguard has consistently won awards since 2012.
  • This broker has been recognized as the “Best ETF Provider” in many years.
  • It won multiple awards from Money Magazine.
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Risk warning: Capital can be lost. Terms and conditions apply.

Conclusion: Vanguard is the King of Low-Cost ETFs Trading

Vanguard is a great place for ETF traders because its ETF trading service is very low-cost. Besides, the broker offers a large selection of financial instruments and lots of commission-free assets.

There are more than 2000 ETFs in many classes available for traders to choose from, including 1800 commission-free ETFs. Vanguard almost charges no fees if market participants trade with the broker’s platform. With trades via phone, the average fee is $25 per trade. Traders with large deposits can even experience lower fees and are offered from 25 to 100 fee-free trades.

Where Vanguard shines is its rich education centre. Market participants can call this broker’s education centre a school for financial investors as they can learn most aspects about investments here.

The biggest disadvantage for Vanguard clients is that this broker has no advanced trading platform. Despite that it offers traders a trading platform compatible with iOS and Android devices, this platform isn’t really professional.

Generally, if you are seeking a low-cost ETF broker, Vanguard is right for you. However, if you are finding a broker with advanced trading platforms, then this broker isn’t a prominent candidate. You can check out our ETF broker comparison page to find out more about ETF brokers with better trading platforms.

Strengths

  • Vanguard is offer low-cost ETF trading service
  • very goog education centre
  • one of the brokers that have consecutively won awards over the years

Weaknesses

  • high ETF saving plans
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