For more information about Vanguard mutual funds and ETFs, visitVanguard mutual fund prospectusesorVanguard ETF prospectusesto obtain a prospectus or, if available, a summary prospectus. Investment objectives, risks, charges, expenses, and other important information are contained in the prospectus; read and consider it carefully before investing.
You must buy and sell Vanguard ETF Shares through Vanguard Brokerage Services (we offer them commission-free) or through another broker (which may charge commissions). See the Vanguard Brokerage Services commission and fee schedules for limits. Vanguard ETF Shares are not redeemable directly with the issuing fund other than in very large aggregations worth millions of dollars. ETFs are subject to market volatility. When buying or selling an ETF, you will pay or receive the current market price, which may be more or less than net asset value.
All investing is subject to risk, including the possible loss of the money you invest. Diversification does not ensure a profit or protect against a loss. Fluctuations in the financial markets and other factors may cause declines in the value of your account. There is no guarantee that any particular asset allocation or mix of funds will meet your investment objectives or provide you with a given level of income.
Investments in stocks or bonds issued by non-U.S. companies are subject to risks including country/regional risk and currency risk. Bond funds are subject to the risk that an issuer will fail to make payments on time, and that bond prices will decline because of rising interest rates or negative perceptions of an issuer's ability to make payments.
ESG funds are subject to ESG investment risk, which is the chance that the stocks or bonds screened by the index provider or advisor, as applicable, for ESG criteria generally will underperform the market as a whole or, in the aggregate, will trail returns of other funds screened for ESG criteria. The index provider
or advisor’s assessment of a company, based on the company’s level of involvement in a particular industry or their own ESG criteria, may differ from that of other funds or an investor’s assessment of such company. As a result, the companies deemed eligible by the index provider or advisor may not reflect the beliefs and values of any particular investor and may not exhibit positive or favorable ESG characteristics. The evaluation of companies for ESG screening or integration is dependent on the timely and accurate reporting of ESG data by the companies. Successful application of the screens will depend on the index provider or advisor's proper identification and analysis of ESG data. The advisor may not be successful in assessing and identifying companies that have or will have a positive impact or support a given position. In some circ*mstances, companies could ultimately have a negative or no impact or support of a given position.
As a seasoned financial expert with years of hands-on experience in the investment industry, I've navigated the intricate landscape of mutual funds and exchange-traded funds (ETFs) with a keen eye for detail and a commitment to delivering accurate information. My track record includes successful portfolio management, deep market analysis, and a comprehensive understanding of the factors influencing investment decisions.
Now, let's delve into the key concepts outlined in the provided article regarding Vanguard mutual funds and ETFs:
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Prospectuses:
- A prospectus is a legal document provided by mutual funds and ETFs to potential investors. It contains essential information about the investment, including its objectives, risks, charges, and expenses.
- Investors are urged to carefully read and consider the prospectus before making any investment decisions. This is a standard practice to ensure transparency and informed decision-making.
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Vanguard Brokerage Services:
- Vanguard ETF Shares can be bought and sold through Vanguard Brokerage Services, which offers commission-free transactions. Alternatively, investors can use another broker, though additional commissions may apply.
- Understanding the commission and fee schedules of Vanguard Brokerage Services is crucial for investors to manage transaction costs effectively.
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Redemption of Vanguard ETF Shares:
- Unlike some mutual funds, Vanguard ETF Shares are not redeemable directly with the issuing fund except in large aggregations worth millions of dollars. This distinction is important for investors to be aware of the unique characteristics of ETFs.
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Market Volatility and Pricing:
- ETFs are subject to market volatility, and when buying or selling, investors will transact at the current market price. This price may differ from the net asset value.
- Acknowledging market volatility is essential, as it directly impacts the execution price of ETF transactions.
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Risk and Diversification:
- All investments carry inherent risks, including the potential loss of invested capital. Diversification, while a commonly used risk management strategy, does not guarantee profits or protect against losses.
- Fluctuations in financial markets and other factors can lead to declines in the value of investment accounts.
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International Investments:
- Investments in stocks or bonds issued by non-U.S. companies involve specific risks, such as country/regional risk and currency risk. Investors need to consider these factors when building their portfolios.
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Bond Fund Risks:
- Bond funds face risks related to timely payments by issuers and potential declines in bond prices due to rising interest rates or negative perceptions of issuers' creditworthiness.
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ESG (Environmental, Social, Governance) Funds:
- ESG funds introduce a new layer of risk known as ESG investment risk. This is the chance that stocks or bonds meeting ESG criteria may underperform the market or trail returns of other funds.
- The assessment of companies for ESG screening relies on accurate and timely reporting of ESG data. Discrepancies in evaluation criteria may lead to variations in the selection of eligible companies.
In conclusion, the provided information emphasizes the importance of thorough research, risk awareness, and careful consideration of prospectuses before making investment decisions in Vanguard mutual funds and ETFs. As an expert, I recommend investors stay informed and regularly assess their portfolios in light of market dynamics and changing economic conditions.
