Investing in Vanguard ETFs: Is it worth it?


Vanguard ETFs are passively managed investment funds that offer numerous opportunities to expand your savings, thanks to their characteristics. Understanding how they work can be useful in order to choose the most suitable one to include in your securities portfolio. With this in mind, below we’ve looked at the company’s history, benefits and how to invest.

Vanguard: The Company

The Vanguard ETF takes its name from the issuing company the Vanguard Group. Knowing its history and what were the reasons that led to the establishment of ETFs is useful to assess its soundness. The Vanguard name is associated with the figure of John C. Bogle, whose 1951 dissertation on funds was the beginning of a profound change in this financial sector.

Bogle went on to analyze the main reason that made investment funds of the time unprofitable. In 1974 he was fired from the Wellington Management Company, an event that would bring enormous changes in the American financial system. In fact, the following year John Bogle created the Vanguard Company, choosing this name in honor of the ship of the famous English Admiral Nelson.

The first fund to be placed on the market was the First Index Investment Trust, which contrary to what one might think, was not immediately successful. The reason? Boyle’s idea was to create a fund with low costs and therefore accessible to a wide target of small and medium investors. In order to do this, there was no real commission for brokers, a factor that was not seen in a positive light and obviously limited its spread.

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However, Boyle’s thinking was innovative and soon succeeded, as the major investment companies of the time began to copy his model. Vanguard funds soon became among the most solid, with high returns and low costs, a valid investment opportunity. All factors that led to the creation of a diverse number of subsequent ETFs.

Today, Vanguard Group is among the largest investment companies in the world, with more than $6 billion in capitalization and investors in over 170 countries. The number of funds issued is around 190 financial products, offering a wide range of investment possibilities.

Why Invest in Vanguard ETFs: Is it worth it?

When evaluating an ETF, among the main factors are: the management company, the cost of the fund and the return. Vanguard Exchange Traded Funds provide advantages in all of these aspects. In fact, the Vanguard Group is among the largest companies in the world to issue funds, offering a high level of security regarding capital. In addition, management costs are among the lowest, providing excellent investment opportunities and ensuring a good margin of return on ETFs.

Since its founding, Vanguard Group has offered very profitable funds. Even today, in a highly competitive market, you will have the opportunity to get consistent returns, thanks to the introduction of the latest Fintech technologies.

Just consider that Vanguard ETFs are managed through a system of algorithms and artificial intelligence that has allowed this company to continue to be among those leaders in the issuance of ETFs. Another aspect to be considered concerns the large number of Exchange Traded Funds made, today about 190, which allow every retail trader to have ample opportunities to diversify their securities portfolio.

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The advantages of buying a Vanguard ETF are also linked to the very nature of ETFs. It must be considered that Exchange Traded Funds offer ample opportunities for operations, since it is possible to invest both with direct trading, i.e. buying a part of the fund, and with CFDs. In the latter case you will have the advantage of opening a position in the short term of both purchase and sale.

Another aspect to evaluate are the characteristics of an ETF, which replicate the performance of an asset in a physical or synthetic way. This means that the return of the fund will not refer to a single security, but to the average of the quotations of all the assets present within it.

Finally, like all financial instruments, there are also risks. Just consider that the capital is not guaranteed, although, given the solidity of the Vanguard Group management company, the risk of default is minimal

Where to Buy Vanguard ETFs

How to buy a Vanguard ETF? In order to carry out this operation, you will have to have a trading platform that allows you to invest in ETFs and that includes Vanguard Group funds within it. Among the brokers that can be considered safe, reliable and above all have recognition, one can consider eToro. A name associated with one of the most innovative online brokers, thanks to the system of social trading and the use of technology applied to finance, such as CopyTrader. Thanks to this broker you will have the possibility to operate immediately on the market and buy a Vanguard ETF, even if you have limited financial experience.

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To operate with eToro the first step is to have an active account with the broker. The free registration can be done directly from the site, or using the practical mobile app, with just a few steps. Just fill out the online forms, verify your identity and activate the account with a first deposit. At this point it will be possible to choose one of the Vanguard ETFs from the practical list of investment funds available, or by entering the ticker of the financial product in the search bar.

The purchase is an intuitive procedure thanks to the presence of an open book which immediately provides all the information on the fund: quotation, daily trend and variation percentages. Moreover, you will have access to a series of technical and fundamental analysis information, such as a real time chart and the latest market news. To complete the order, all you have to do is enter the quantities you want to buy or sell, all without commissions but with the application of a spread.


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