Steps for adding ETFs to your portfolio


How can investors purchase Vanguard ETFs? Vanguard investing experts Brian McCarthy and Rich Powers explain how investors can add Vanguard ETFs to their portfolio.

Notes:
All investing is subject to risk, including the possible loss of the money you invest. Diversification does not ensure a profit or protect against a loss.
For more information about Vanguard funds or Vanguard ETFs, visit vanguard.com, or call 877-662-7447, to obtain a prospectus, or, if available, a summary prospectus. Investment objectives, risks, charges, expenses, and other important information are contained in the prospectus; read and consider it carefully before investing.
This webcast is for educational purposes only. We recommend that you consult a tax or financial advisor about your individual situation.
Vanguard ETF Shares are not redeemable with the issuing Fund other than in very large aggregations worth millions of dollars. Instead, investors must buy and sell Vanguard ETF Shares in the secondary market and hold those shares in a brokerage account. In doing so, the investor may incur brokerage commissions and may pay more than net asset value when buying and receive less than net asset value when selling.
There may be other material differences between products that must be considered prior to investing.
Vanguard Marketing Corporation, Distributor of the Vanguard Funds.
U.S. Patent Nos. 6,879,964; 7,337,138; 7,720,749; 7,925,573; 8,090,646; and 8,417,623.
© 2016 The Vanguard Group, Inc. All rights reserved.


TRANSCRIPT

Amy Chain: Now Bernadine is asking us about how she can invest in ETFs at Vanguard. Brian, can you talk to us about that?

Brian McCarthy: Well, you know, I can, and similar to many other firms, to invest in an ETF, you would have to open a brokerage account. So that is the platform that affords you the flexibility to invest in many different products, be it a broad array of mutual funds. Some financial firms offer fund supermarkets. There might be fixed income products, equities, but also as a question, as ETFs. So because it’s specific to Vanguard, I don’t like to do a sales pitch here, but I’ll just explain for Vanguard you would need to open a brokerage account, you would fund the account, and then at that point some of the things we talked about, it would determine what portfolio you’re looking for. You could derive the ETFs that you’re interested in investing in. And as you just mentioned, Amy, we don’t just offer Vanguard ETFs here, right? We offer Vanguard ETFs and really all exchange-listed ETFs from all the issuers. One of the benefits you get at Vanguard, if you’re interested in investing in a Vanguard ETF, is we talked about cost being such an important factor to investment returns, the 70 or so ETFs that we offer are zero-commission on our platform. So you may not find that if you were at another financial firm, although other financial firms do also have zero-commission ETF offers out there. But I would say even if you’re paying a zero commission, always be mindful of the operating costs of that particular investment because there may be the case that there’s a high expense ratio, and you’re paying zero commission where you’d rather pay a seven- or ten-dollar commission for a lower-expense ratio option.

Rich Powers: Yes, I think it’s really important, so cost is so key. I know we talk about that a lot at Vanguard, but there’s really three big components to cost when you’re thinking about an ETF. It’s the expense ratio, it’s the commission you might pay to transact, and it’s the bid-ask spread. When you kind of looked at them all together, side by side, and do a comparison, that’ll give you a sense for what is it going to run me to hold this portfolio for a year, three years, five years, and then you can make an informed decision.

Amy Chain: And, importantly, if you’d like to know more about ETFs, you can click on the Resource widget on the bottom of your screen, and it’ll take you to a wealth of information on the topic.

Notes:
All investing is subject to risk, including the possible loss of the money you invest. Diversification does not ensure a profit or protect against a loss.
For more information about Vanguard funds or Vanguard ETFs, visit vanguard.com, or call 877-662-7447, to obtain a prospectus, or, if available, a summary prospectus. Investment objectives, risks, charges, expenses, and other important information are contained in the prospectus; read and consider it carefully before investing.
This webcast is for educational purposes only. We recommend that you consult a tax or financial advisor about your individual situation.
Vanguard ETF Shares are not redeemable with the issuing Fund other than in very large aggregations worth millions of dollars. Instead, investors must buy and sell Vanguard ETF Shares in the secondary market and hold those shares in a brokerage account. In doing so, the investor may incur brokerage commissions and may pay more than net asset value when buying and receive less than net asset value when selling.
There may be other material differences between products that must be considered prior to investing.
Vanguard Marketing Corporation, Distributor of the Vanguard Funds.
U.S. Patent Nos. 6,879,964; 7,337,138; 7,720,749; 7,925,573; 8,090,646; and 8,417,623.
© 2016 The Vanguard Group, Inc. All rights reserved.