VTI Fractional Shares: Total Stock Market
LAST UPDATED: May 9, 2023 | By Conrad Golly
In recent years, investing in fractional shares has become more popular. More brokerage account platforms have started to allow buying of fractional shares. You can buy fractional shares of stocks, mutual funds, and ETFs, but you probably already knew that.
You can only buy fractional shares of VTI from some brokerage platforms. However, with Vanguard you can reinvest your ETF dividends that come from a split stock back into the stock as fractional shares.
VTI is a good ETF to invest in due to its diversification, however, VTI (Vanguard Total Stock Market Index Fund ETF) is only available through Vanguard as full shares.
What are VTI Fractional Shares?
If you’re new to investing, you might not have enough money to buy a whole share of a stock or ETF like VTI. That’s where fractional shares come in. Fractional shares allow you to buy a portion of a share, which means you can invest in VTI with as little as a few dollars.
VTI stands for Vanguard Total Stock Market ETF. It’s an ETF that tracks the performance of the entire U.S. stock market. By investing in VTI, you’ll own a piece of thousands of different companies, which can help you diversify your portfolio.
Fractional shares of VTI work the same way as regular shares. When you buy a fractional share, you own a portion of the ETF. The value of your investment will go up or down based on the performance of the underlying stocks in the ETF.
One advantage of investing in VTI fractional shares is that it allows you to invest in the stock market without having to save up a large sum of money. You can buy as little as $1 worth of VTI, which means you can start investing with just a few dollars.
Another advantage of investing in VTI fractional shares is that it allows you to invest in a diversified portfolio of stocks. Instead of buying individual stocks, which can be risky if you’re not experienced, you can buy a portion of VTI and own a piece of thousands of different companies.
How to Buy VTI Fractional Shares?
If you’re interested in investing in VTI, the Vanguard Total Stock Market ETF, but don’t want to buy whole shares, you can invest in VTI fractional shares. Here’s what you need to know about buying VTI fractional shares.
Choosing a Brokerage
To buy VTI fractional shares, you’ll need to choose a brokerage that offers them. Some popular brokerages that offer VTI fractional shares include Fidelity, Merrill Edge, Charles Schwab, and TD Ameritrade. It’s important to choose a brokerage that fits your investing needs, including commission-free trades, real-time execution, and limit orders.
Buying VTI Fractional Shares
Once you’ve chosen a brokerage, buying VTI fractional shares is easy. Simply open a brokerage account and fund it with the amount you’d like to invest. Then, search for VTI and select the option to buy fractional shares. You can invest in VTI using dollar amounts, rather than share amounts, which makes it easy to invest small amounts of money.
Corporate Actions and VTI Fractional Shares
When you invest in VTI fractional shares, you’ll still be eligible for corporate actions, such as stock splits, dividends, and reverse splits. Your fractional shares will be adjusted accordingly, and you’ll receive your share of the corporate action based on your ownership percentage. You’ll also have voting rights for any proxy voting related to VTI.
In summary, buying VTI fractional shares is a great way to invest in VTI without having to buy whole shares. Choose a brokerage that offers VTI fractional shares, fund your account, and buy fractional shares of VTI using dollar amounts. You’ll still be eligible for corporate actions, and you’ll have voting rights for any proxy voting related to VTI.
Why Invest in VTI Fractional Shares?
If you’re looking to invest in a diversified portfolio of stocks, VTI fractional shares may be a great option for you. Here are some reasons why:
Diversification
VTI is an ETF that tracks the performance of the entire U.S. stock market, giving you exposure to a wide range of companies across various sectors and industries. By investing in VTI fractional shares, you can own a small piece of each of these companies, which can help spread out your risk and increase your chances of long-term success.
Low Cost
VTI has a low expense ratio, which means that you’ll pay less in fees compared to other actively managed funds. Additionally, by investing in fractional shares, you can purchase exactly the amount of VTI that you want, without having to worry about buying whole shares or paying high commissions.
Flexibility
With VTI fractional shares, you can invest any dollar amount you want, making it easy to start small and add to your investment over time. This flexibility allows you to tailor your investment to your specific needs and goals.
Easy Access
Investing in VTI fractional shares is easy and can be done through most brokerage accounts. You can also purchase VTI fractional shares through a robo-advisor, which can help you manage your investment and provide advice based on your risk tolerance and goals.
Risks
It’s important to keep in mind that investing in VTI fractional shares, like any investment, comes with risks. The value of your investment can go up or down, and there is always the possibility of losing money. However, by investing in a diversified portfolio like VTI, you can help mitigate some of these risks and increase your chances of long-term success.
VTI Fractional Shares vs. Other Investment Options
If you’re looking to invest in VTI fractional shares, you may be wondering how they compare to other investment options. In this section, we’ll take a closer look at VTI fractional shares compared to Vanguard ETFs, other ETFs, stocks, mutual funds, and real estate investments.
VTI vs. Vanguard ETFs
VTI is a Vanguard ETF that tracks the performance of the CRSP US Total Market Index. VTI fractional shares allow you to invest in this ETF with as little as $1. VTI is a great option if you’re looking for a low-cost, diversified investment in the US stock market.
However, if you’re looking for exposure to a specific sector or region, you may want to consider a different Vanguard ETF, such as VOO, which tracks the S&P 500.
VTI vs. Other ETFs
While VTI is a great option for investing in the US stock market, there are other ETFs that may be better suited to your investment goals. For example, if you’re looking for exposure to a specific sector, such as technology or healthcare, you may want to consider an ETF that tracks that sector.
Additionally, if you’re looking for exposure to international markets, you may want to consider an ETF that tracks a global index.
VTI Fractional Shares vs. Stocks
Investing in individual stocks can be a great way to build wealth, but it can also be risky. VTI fractional shares allow you to invest in a diversified portfolio of US stocks, reducing your risk compared to investing in individual stocks. Additionally, VTI fractional shares are affordable, allowing you to invest in the stock market with as little as $1.
VTI Fractional Shares vs. Mutual Funds
Like VTI, mutual funds are a great way to invest in a diversified portfolio of stocks. However, mutual funds typically have higher fees than ETFs, making them more expensive to own. Additionally, mutual funds may have minimum investment requirements that make them less accessible to investors with limited funds.
VTI Fractional Shares vs. Real Estate Investments
Investing in real estate can be a great way to build wealth, but it can also be expensive and time-consuming. VTI fractional shares offer a low-cost, passive way to invest in the US stock market, while real estate investments require more active management.
If you’re interested in investing in real estate, you may want to consider real estate investment trusts (REITs) or real estate crowdfunding platforms, such as Groundfloor or Fundrise.
Wrapping It up: VTI Fractional Shares
Congratulations! You have learned all about VTI fractional shares and how they can help you invest in the stock market. Investing in VTI fractional shares is a great way to start investing with a small amount of money.
There are many brokerage platforms that offer VTI fractional shares, including Fidelity Mobile, M1 Finance, Personal Capital, and Robinhood. Each platform has its own unique features and benefits, so it’s important to do your research and find the one that’s right for you.
When investing in VTI fractional shares, it’s important to keep in mind that the stock market can be volatile and unpredictable. It’s important to have a long-term investment strategy and to diversify your portfolio to minimize risk.
So what are you waiting for? Start investing in VTI fractional shares today and take control of your financial future!
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