Purchasing Vanguard Funds Through Alternative Brokerages: A Guide
Invest Vanguard Funds Without a Direct Account
Buying Vanguard mutual funds and ETFs isn't exclusive to those with accounts directly through the financial giant. In fact, you can purchase these investments through various online brokerages and investment houses too! Brokers such as Fidelity, Charles Schwab, BlackRock, and more, offer access to Vanguard funds, as well as those managed by other investment companies.
However, it's essential to note that bypassing a Vanguard account may imply additional charges. Typically, brokers impose fees and commissions, even if they're online discount brokers. Some may waive these charges for specific Vanguard funds or other funds, but not all brokers follow this practice.
The Vanguard Group: A Pioneering Financial Powerhouse
Established in 1975, The Vanguard Group is a financial powerhouse boasting approximately $10.1 trillion in assets under management worldwide as of Dec. 31, 2024. Known for its extensive selection of exchange-traded funds (ETFs) and mutual funds, Vanguard excels in bonds and equities with diverse investment objectives and market niches.
Vanguard bond funds primarily focus on corporate bonds, deviating from government or sovereign bonds. In contrast, Vanguard equity funds center around international stocks, domestic stocks, and sector-specific equities.
The fees associated with Vanguard ETFs and mutual funds are strikingly low and highly competitive, significantly below industry averages. While some of its mutual funds are actively managed, most ETFs employ a passive indexing approach, initially popularized by late founder John Bogle (1929-2019).
Vanguard: Real Ownership and Minimal Fees
Vanguard operates more like a mutual fund credit union, as it's owned by its investors rather than typical fund management companies. Moreover, Vanguard was an early adopter of selling funds directly to investors, eliminating sales fees, and providing a family of no-load, high-performing funds, including over 200 mutual funds and 75 ETFs in the U.S. alone.
When investing through third-party brokers, miscellaneous fees are relatively low with Vanguard funds, primarily incurred if the account balance falls below $10,000 or if electronic documents are declined.
Vanguard Funds Across Third-Party Brokers
Vanguard offers nearly all of its mutual funds and ETFs commission-free through its proprietary investment platform. The same wide range of funds can be purchased at third-party brokers, albeit potentially subject to a broker's standard trading fees. Trade agreements between Vanguard and other brokers may offer some of its funds commission-free, while others will incur the standard trading fees of the specific broker.
Account Types Offered by Vanguard
Vanguard provides a diverse range of accounts tailored for various needs, such as college savings, small business owners, retirement savers, and more. Some of the most common accounts include individual and joint brokerage accounts, corporate investment accounts, 529 savings plans, trusts, IRAs, Roth IRAs, and 401(k)s.
Choosing Between Direct Purchase and Third-Party Brokers
Due to lower fees and direct access to Vanguard's extensive offerings, purchasing funds directly through Vanguard is generally more cost-effective. This is consistent with other prominent investment companies like Fidelity and BlackRock. However, third-party brokers can offer various services, and fees may apply depending on the broker's offerings.
Which Brokerages Sell Vanguard Funds?
Key financial service providers such as Fidelity, Charles Schwab, E-Trade, Interactive Brokers, and Vanguard Brokerage Services themselves, sell Vanguard Funds alongside their own products.
In Summary
By extending its reach through multiple investment platforms, Vanguard caters to a broader investor base, driving increased capital and revenue for its top-performing products in the industry. The wider network ultimately benefits investors seeking access to Vanguard ETFs and mutual funds.
- You can invest in Vanguard's extensive selection of exchange-traded funds (ETFs) and mutual funds, such as international stocks, domestic stocks, and sector-specific equities, not only through a direct Vanguard account but also via third-party brokerages like Fidelity, Charles Schwab, and E-Trade.
- In contrast to directly purchasing Vanguard funds, third-party brokers may impose additional charges, including fees and commissions, so it's important to consider these costs when deciding which platform to use for investing.
