Vanguard Review 2023 | Bankrate

Pros: Where Vanguard stands out

Vanguard Portfolio Watch

Vanguard Portfolio Watch is a tool that automatically examines your portfolio to see how it compares to the criteria that you and Vanguard have set. The goal is to make sure your assets are diversified and minimize risks where possible. You can include not only your Vanguard assets, but all holdings so that you can get a comprehensive picture of your financial life and where you might have unidentified risks.

Once you’ve loaded your holdings into the tool, Portfolio Watch will give you a breakdown of what kinds of funds you own by a number of factors, for example, company size or investing style (value vs. growth). Then if there’s a place where you need more exposure – say you own too many funds invested in small companies – it can recommend the funds you need to purchase to even out your portfolio. It’s a neat tool to get a broad perspective on what you own and what you might like to own.

Low-cost funds

Vanguard has long been synonymous with low-cost funds, and that tradition continues. In addition to its own ETFs, Vanguard’s mutual funds number more than 150.

Whether you choose one of its mutual funds or ETFs, you can be sure you’re getting a good deal. Besides not charging any sales load, Vanguard’s funds have among the lowest expense ratios in the industry, fees that could otherwise really eat into your returns over time.

Vanguard says that its average mutual fund has an expense ratio of a razor-thin 0.10 percent. That means you’ll pay just $10 annually on average for every $10,000 you have invested in its funds. That compares to 0.55 percent across the rest of the industry, based on 2021 data from Morningstar and Vanguard. That’s a huge advantage for Vanguard, and increases your average annual return by nearly one-half of a percent annually. 

The average ETF expense ratio was even cheaper on Vanguard’s ETFs, at just 0.06 percent, compared to 0.24 percent for the industry as a whole in 2021. 

Of course, you won’t have to be a Vanguard customer to buy its funds, but its no-fee commission structure makes it easier and cheaper to do so.

No-transaction-fee mutual funds

Vanguard’s mutual fund offering is among the best in the industry and you won’t have to worry about excessive fees. About 160 Vanguard funds and about 3,000 funds from other firms are available without transaction fees. That compares nicely to some of the top players in the industry, such as Charles Schwab and TD Ameritrade, both of which have more than 4,000 no-transaction-fee funds. If mutual funds are likely to be your main investment vehicle, Vanguard is a solid broker choice. 

Commission-free stocks and ETFs

Vanguard is among the major online brokerages that have lowered commissions on stocks and ETFs to $0. But its decision was hardly in the vanguard at all, as the company was among the last major online brokers to make the move to commission-free. But the shift definitely behooves a fund company that’s long been known for its investor-friendly pricing. The pricing structure largely does away with the previous too-complex, multi-tiered pricing system, where commissions were determined by how much you had invested in Vanguard funds. 

A nice perk that could be overlooked is that Vanguard does not charge you to place an order of its own funds (either mutual funds or ETFs) by phone, unlike many other brokers. However, it may charge you $25 to order ETFs from other fund companies via phone, depending on how much you have invested in Vanguard funds. Stock orders by phone will run you $25, as well, though customers with more than $1 million in Vanguard funds will receive this service for free.