Steadfast FinancesVanguard Now Offering Free Trades on In-House ETFs

Vanguard Now Offering Free Trades on In-House ETFs

Filed in ETFs , Index Funds , Investing 101 1 comments

Not to be outdone by low cost ETF competitors like Charles Schwab, Vanguard customers now have the option to trade Vanguard ETFs commission free, as well as benefit from online discount broker like commissions on individual stock trades.

  • Commission-free ETF transactions. Vanguard brokerage clients may make commission-free transactions in Vanguard’s entire line-up of 46 low-cost ETFs,
    which is the largest suite of ETFs available without commissions.
  • Ultra-low equity commissions. Most Vanguard brokerage clients will pay $7 or $2 to trade stocks and non-Vanguard ETFs.

1) A $20 account service fee is charged annually. The fee is waived for Voyager, Voyager Select, and Flagship members.
2) See the Vanguard Brokerage Services Commission and Fee Schedules on for full details, including limits and exclusions.
3) The reduced commissions or commission-free trades will apply to the first 25 transactions in each calendar year to any combination of stocks and
non-Vanguard ETFs. The number of these transactions is limited to 25 per client, as identified by the primary Social Security number on the account.
For Flagship members, the 25 commission-free transactions can also be applied to option and transaction-fee fund transactions. Vanguard Brokerage reserves the right to end these offers at any time.

If you’re a straight up index fund junkie (which I for my Roth IRA), this might not be of tremendous value to you. But if you’re a bit of a stock picker, sector picker, or you’re a frugal investor and like to minimize your commission fees as much as humanly possible (which I also am), this might be a fairly significant development for you if you were considering leaving Vanguard for a lower cost provider.

The only thing I would suggest is not to go nuts trading Vanguard ETFs just because it’s free (25 times per year). There are substantial pros and cons to buying/trade ETFs, but it is probably in your best interests to buy and sell most ETFs only if you know what you’re doing, you watch the market on a regular basis, or you work within a specific sector and you know the “in’s and out’s” of your industry better than the Average Joe.

For the curious minded, here is a lineup of Vanguard’s current portfolio of ETFs; 46 in all. Some are Plain Jane, broadly diversified global index type ETFs, while others are higher risk sector specific ETFs (REITs, Consumer Discretionary, etc.).

Disclosure: I am a Vanguard customer, but was not compensated for highlighting their latest press release.

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Posted by CJ   @   4 May 2010 1 comments
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May 7, 2010
4:41 pm
#1 pfstock :

On the ETF front, Fidelity has been offering free trades on certain iShares ETFs for a few months now. I have made a couple of trades in my Fidelity account. I noticed that although the commission is $0, they still charge a (very small) SEC fee when you sell.

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