Vanguard Funds on Charles Schwab

Can I Buy Vanguard Mutual Funds on Charles Schwab in 2024?


Does Charles Schwab offer Vanguard mutual funds (Retirement, Stock, VTI, VTSAX, S&P, and Index Funds)? Schwab transaction fee for vanguard funds, expenses, and performance.


Can You Buy Vanguard Funds through Schwab?


Yes, it is possible to purchase Vanguard mutual and exchange-traded funds inside a brokerage account at Schwab. To prove our point, here are four examples:


does schwab offer vanguard funds


Vanguard Balanced Index Fund (VBIAX)


The first fund we’re going to look at Charles Schwab is Vanguard’s balanced fund. Trading with ticker symbol VBIAX, this fund invests in both equities and fixed income, which creates the balance the fund seeks to achieve. Because the fund is composed of both debt and equity, it tracks two indexes, one for bonds and another for stocks. Holdings span a wide range of economic sectors, although most of the assets are from U.S. issuers of high quality.

Morningstar has a high opinion of this fund, thanks in part due to its very low expense ratio, which is just 0.07% annually at last check. The analyst grades the fund 4 stars out of 5 over 5-year, 10-year, and overall performances. Schwab’s profile for VBIAX shows a Morningstar Style Box with a moderate amount of interest-rate sensitivity.


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Vanguard Emerging Markets Bond Fund (VEMBX)


Investors who seek an international fund at Charles Schwab should check out Vanguard’s emerging markets fixed-income fund. It trades on the Nasdaq with ticker symbol VEMBX. The portfolio holds bonds issued by entities located in emerging markets. Most of these institutions are governments, although the fund can invest in corporate debt as well. Despite the focus on emerging economies, VEMBX can hold debt that is denominated in U.S. dollars or is hedged in some way with the greenback.


buying vanguard funds through schwab


Because the mutual fund invests in emerging markets, many of the debt instruments in the portfolio are below investment grade. Over 55% are rated B or lower. Only 1% are rated AAA. Here are some examples of bonds we found:

- Indonesia (Republic of)
- Chile (Republic of)
- Romania (Republic Of)
- Dominican Republic
- Oman (Sultanate Of)
- Vale Overseas Limited

Morningstar has a high opinion of this fund, which has 5 stars for overall and 5-year investigations. On a 3-year basis, the fund has 4 stars.

VEMBX has an expense ratio of 55 basis points, which seems rather high for a Vanguard fund. But the fund has managed to outperform both its category and its index with this management fee.


Vanguard Dividend Appreciation Index Fund (VDADX)


Moving from international bonds to domestic stocks, we have a dividend appreciation fund. This one has a very low expense ratio of just 0.08% per annum. This low annual cost has helped the fund achieve a lifetime return of 10.51% annualized, which is quite good. This return puts it above its category, which is large blend.


buying vanguard funds through schwab


VDADX invests in companies that have a history of increasing dividends over time. The fund collects these dividends and pays them to shareholders quarterly. Its current yield is 1.89%. Investors must like this fund because it has over $80 billion in it.

Morningstar also likes the fund, which has 4 stars for overall and 5-year performances. Morningstar grades its historical return as average and its risk as low. Lipper has given its seal of approval for the fund’s 5-year performance, grading it a 5 out of 5. Overall, Lipper gives it a 4.

Trading VDADX or any other Vanguard fund at Schwab is quite simple. On the website or mobile app, there will be trade buttons (green for buy and red for sell). Clicking or tapping on either brings up the order ticket. Here, the minimum purchase amount will be shown. There will also be a reinvestment selector for dividends and capital gains. And there is a choice for the transaction fee (deduct from purchase or add to the total amount).


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Vanguard Health Care Fund (VHT)


Besides mutual funds, Vanguard also creates and manages a collection of exchange-traded funds. One that we found on the Schwab platform is the Vanguard Health Care Fund. Trading with ticker symbol VHT, it has an average daily volume of more than 200k shares, so it’s really popular. Unlike mutual funds, ETFs trade intra-day with market prices that may deviate from NAV. This may or may not be an advantage, depending on what you’re looking for.


schwab transaction fee for vanguard funds


VHT invests in health care stocks. It is passively managed, which results in a very low expense ratio—just 10 basis points. The fund follows the MSCI US IMI Health Care 25/50 Index. Some of the holdings we found include:

- UnitedHealth Group Inc
- AbbVie Inc
- Johnson & Johnson
- Eli Lilly and Co
- Merck & Co Inc
- Abbott Laboratories
- Pfizer Inc

Security analysts have positive things to say about VHT. Lipper grades it a 5 for its 3-year, 5-year, and overall histories. CFRA gives it 5 stars out of 5, and Morningstar ranks it 5 and 4 stars across all timeframes studied.


Finding Vanguard Funds at Schwab


Whether you’re looking for mutual or exchange-traded funds from Vanguard, they are really easy to find on Schwab’s website. Simply click on the Research tab in the top menu and select either ETFs or mutual funds in the drop-down list. On the next page, the mutual fund or ETF page, you’ll see a link for the appropriate screener.

On either screener, fund family can be specified in the Basic criteria, which appears at the top of the left-hand menu. During our probing with both screeners, we found 82 Vanguard ETFs and 133 Vanguard mutual funds.


Schwab Transaction Fee for Vanguard Funds


Every Vanguard mutual fund purchased through Schwab is subject to a $74.95 transaction fee. This charge is applied to every purchase submitted online or through Schwab’s automated phone service. Using a live rep over the phone tacks on an additional $25. There is a $3,000 minimum initial purchase amount and a $1 subsequent purchase amount.

Both the transaction fee and the minimum purchase amount can be avoided by trading Vanguard ETFs. They have no minimum purchase amount (other than 1 share), and there is no commission on them.


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About the Author
Chad Morris is a financial writer with more than 20 years experience as both an English teacher and an avid trader. When he isn’t writing expert content for Brokerage-Review.com, Chad can usually be found managing his portfolio or building a new home computer.