Vanguard to Split Three ETFs
Post viewed 664 times, 2 so far today
I often heard of stock splits, but this is the first time I learned splits of shares of exchanged-traded funds (anybody else has done that already?). Of course, since ETFs are traded just like stocks, the split shouldn’t be a surprise at all.
Mutual fund giant Vanguard, which is also becoming a major player in ETF, announced yesterday that it plans to make a 2-1 split on three of its most popular ETFs on June 17:
- Vanguard Total Stock Market (VTI)
- Vanguard Emerging Markets (VWO)
- Vanguard Extended Market (VXF)
The reason for the split is to make these funds, which are all traded above $100 now, “more affordable” for small investors. The splits will cut the price of each of the three ETFs in half, so investors with small funds can buy more shares, one way to attract more investors.
Then again, ETFs are actually mutual funds, but I never heard of mutual fund splits. The reason for that is, as I can think of, that we can buy fractional shares of a mutual fund. If I only have $50, then I can buy 0.5 shares of a fund. That’s not the case for ETFs, though.
Featured Financial Products
- Feeling the pain at the pump? Find out how you can get up to 5% cash back with these gas rewards credit cards. It's the money you have to spend anyway. Why not get some back?
- Ready to buy stocks/ETFs with zero commission? Check out the Zecco review and try Zecco Trading to get 10 free trades/month.
Related Articles You Don't Want To Miss
Trackbacks & Pingbacks
- Pingback by Personal Finance: The Week in Review # 1 | MoneyRemix on June 7, 2008 @ 10:07 am
- Pingback by Friday Finance Findings for June 6th : Generation X Finance on June 8, 2008 @ 8:30 pm
5 Comments
Share Your Thouhgts
Your opinion matters. Please use the form below to share your thoughts on Vanguard to Split Three ETFs with us.Recent Entries
- iShares 529 Plan: Save for College with ETFs
- Dow, The Near 6-Year Low
- Transfer A Brokerage Account: How Much Does It Cost?
- ShareBuilder Educational Account Promotion: 3 Free Trades
- China Life Insurance: 5 Years on NYSE
- Get Your Free ZoneAlarm Pro Firewall Today
- IGoChecking Has The Best Interest Checking Account Rate
- NCUA Insurance Is As Good As FDIC Insurance
- Weekend Linkage - November 16, 2008
- Equifax Credit Monitoring Silver Free Two-Year Subscription
- Recent Bank Findings: OnBank, ShoreBank Direct and Venture Bank
- Is Citi Stock A Buy Now?
- WTDirect Lowered Savings Account Rate to 3.06% APY
- USPS to Increase Shipping Costs Next Year
- Free eBook Download: Vulnerability Management for Dummies
- Asset Allocation: What It Is and Why It Is Important
- Virtual Bank eMoney Market Account $20 Referral Bonus
- Got Flu Symptoms? Google Flu Trends Help You See Flu Activities This Season
- ING Posted First Ever Quarterly Loss
- Roundup of Available Referral or Sign-up Bonuses
- October 2008 Score Card — Part I: Net Worth
- Ebates Promotion: Get $10 Bonus This Holiday Season
- Circuit City Bankrupted
- DollarSavingsDirect Reviews
- Weekend Linkage - November 9, 2008
I think VTI (which I own) is around $150?
The only advantage I can think of is that if the price is lower, it is easier to buy round numbers or board lots which might result in a slightly better price for the buyer.
Or maybe it’s just marketing.
Mike
ShareBuilder, while not the greatest broker in the world, will allow one to buy partial shares of ETFs.
The price of VTI showing in the picture may not be accurate because I probably didn’t place the cursor at the end of the curve
Yes, a lower price could make buying round number of shares easier, even with small money. That could increase trading volume since more people can buy the shares without having to “save” money. Eventually, the split could increase market shares of VTI. And yes, it’s all marketing!
ShareBuilder does allow partial shares, but somehow I think their commission is too high. And with ShareBuilder what investors do isn’t really “trading.”