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Tuesday, May 22, 2007

ETFs sold by Vanguard Mutual Group

Vanguard offer 4 bond ETFs and 27 stock ETFs. The stock ETFs cover different segments, such as large cap, mid cap, small cap, speciality, sector and international.

An ETF (exchange traded fund) is a fund comprising of many investments. You can trade the units of the ETF in a stock exchange at a specific price. The trade will be done, if there is another person willing to trade with you at that price.

A mutual fund is also a fund comprising of many investments. You will buy and sell based on the net asset value computed by the fund manager at the end of the day.

The Vanguard ETFs are large, well diversified, low cost funds.

The expense ratio for most of these ETFs are around 0.11% (yes, one tenth of 1%). The lowest is 0.07% and the highest is 0.28%. (By contrast, the actively managed funds in Singapore have an expense ratio of 1.5% to 3.5%.)

Some of the ETFs have more than 3,000 holdings. This is clearly a well diversified fund. Most of them have more than 200 holdings (which is quite well diversified).

Here are Vanguard's key advantages:

* indexing expertise, with 30 years of experience
* low expense ratio
* trusted name: competitive performance, low cost and high ethical standards.

I found that I can buy and sell the Vanguard ETFs through POEMS (offered by Philips).

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