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Vanguard drops rates for ETF and stock trades!
Old 05-04-2010, 11:50 AM   #1
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Vanguard drops rates for ETF and stock trades!

As alluded to by Steve O in another thread Vanguard has made some significant changes in its brokerage fees. Trading Vanguard ETFs are free and depending on your Vanguard status your stock and non-Vanguard ETF trades are $7 or $2 - after using up some free trades. Vanguard Pressroom

This is a huge step for them and I will be seriously considering switching from Scottrade to Vanguard. Your Vanguard status is determined by your total family holdings directly with them so you can now add your taxable investments to tax deferred and get a leg up.

DD
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Old 05-04-2010, 11:53 AM   #2
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Yep. Good old fashioned competition here. This is their response to recent "commission-free ETF" rollouts by Schwab and Fidelity.
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Old 05-04-2010, 11:53 AM   #3
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For those of you who don't use Vanguard your Vanguard status is not just a merit badge. It allows access to cheaper/free services as well as access to lower ER Admiral share funds which means more money for FIRE!

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Old 05-04-2010, 12:09 PM   #4
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At least now, ETF commissions are not one of the criteria to choose a broker. This helps move service, statements, web site, etc. higher up on the list of reasons to choose a financial institution.
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Old 05-04-2010, 12:53 PM   #5
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This is good, I will be starting taxable investing a year from now, and was thinking I would have to move away from Vanguard to do that. Ultimately, 80% of my income in retirement is supposed to come from a taxable account, so it is a big issue for me. That would have been a lot of money separate from my Vanguard accounts, especially including cash, which most likely will not be with Vanguard (I want to CD ladder at competitive rates).
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Old 05-04-2010, 01:31 PM   #6
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Right now VBS is still separate from Vanguard mutual funds, so you will still have to keep all your ETFs separate from your Vanguard accounts. This is a big complaint with Vanguard: If you sell an ETF, the money cannot be used to buy a mutual fund until T+3. This is not the case at other brokers (no need for margin account).
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Old 05-04-2010, 11:45 PM   #7
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Note that this and similar moves from the competition now finally and completly destroy the full service broker model. Vanguard gives advice in a fee for service manner, and then charges here for just the execution of the trade, no research or other services of questionable value. Perhaps this could lead to a full unbundling of services so you can choose what to pay for.
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Old 05-13-2010, 09:23 PM   #8
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Does this mean you can "day/week/month" trade with no commission penalty?

Buy today... if price goes up 5% sell, if it doesn't oh well, just hold and keep it for a long time as usual. Since ETF's are basically like Mutual Funds right? The risk is spread over a "portfolio" of stocks/funds? I'm putting money into MF anyway, might as well do it with ETFs?

Or am I totally misunderstanding ETFs and this no commission deal.

I was reading on their site that you are limited to 25 trades for that one ETF per year.
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