To add my own clarification, mutual funds--as far as I know all mutual funds--can be held in two different ways. You can open an account directly with the mutual fund company itself, or you can hold mutual funds in a brokerage account. Usually there are small
advantages to holding directly with the fund company itself--little benefits, perks, and cost savings, but there is the considerable additional nuisance of having a totally separate account at a separate firm.
Some firms, for example Schwab, Fidelity, and Vanguard, "have" a mutual fund company and also "have" a brokerage. However seamless it may look, if you look at the statement fine print you'll be amazed at the number of different business identities that make up the thing called "Fidelity." Vanguard operates a brokerage service called VBS. Vanguard operates a (group of separate) mutual fund companies called "The Vanguard Group." Vanguard also issues ETFs.
ETFs are like stocks and as far as I know ordinary retail investors can only buy them through brokerages.
When you have an account "at" Vanguard, you have Vanguard mutual fund accounts, which you hold directly. You may also have a Vanguard Brokerage Services account, in which you can hold AT&T stock, PIMCO mutual funds, iShares ETFs--and Vanguard ETFs.
ronin wrote:Is there a practical difference between using Vanguard's ETFs via a brokerage account versus using their mutual funds via a mutual fund account, keeping in mind this will be a taxable account? I assume Vanguard offers an EFT of most of their mutual funds and then some unique ones, correct?
For a summary of the practical differences between ETFs and mutual funds:
[url]http://www.bogleheads.org/wiki/ETFs_vs_Mutual_Funds]ETFs versus Mutual Funds[/url]
I personally find ETFs to be a PITA because you have to place your order when the market is open (which, if you're employed, is a little impolite to one's employer), and because there's no provision for automatic purchases, exchanges, or withdrawals.
For what Vanguard offers, I really suggest that you spend a little quality time exploring their website--at least as much time as you'd spend in an auto dealership when looking for a car, or trying on clothing in a clothing store. ETFs are typically index funds--the Grand Old Original ETF, SPY, was an S&P 500 fund--and the rules for ETFs make it possible but difficult to offer actively managed funds. All the popular mainstream Bogleheadish Vanguard index funds are available as both mutual fund and ETF. There are many funds that aren't available as ETFs, and some ETFs that aren't available as fund.
Go to http://personal.vanguard.com/
, "What We Offer," Vanguard Funds, and high on the page you'll see these two links (or you can click them here):All Mutual FundsAll ETFs
I'm serious, go there right now, spend ten minutes.
The summary page for every fund shows right at the top if it's available as an ETF, or vice versa.
By the way, an Exchange Traded Fund is an ETF, ee, tee, eff. This
is an eft
. (Awww! Isn't it cute
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