INDEX FUNDS

Vanguard vs. Blackrock Funds: Is One Better Than the Other?

If you’re an owner of an exchange-traded fund (ETF) or index fund, chances are they are from either Vanguard or Blackrock. These two companies are the powerhouses in the industry.

Vanguard

Vanguard was established in 1975 by Jack Bogle, who believed that a mutual fund company should not have outside owners. Instead, shareholders of the Vanguard Group own the company’s different funds. Thus, the shareholders are the actual owners of Vanguard. Vanguard is publicly traded, which differs from most other prominent investment firm

Blackrock started in 1988 with eight people in a single room who shared a determination to put clients’ needs first. By 1999, Blackrock rapidly grew to $165 billion in assets under management and then went public on the New York Stock Exchange.

Blackrock

Index Funds, Exchange-Traded Funds, and Mutual Fund

Before we get into some of the differences in Vanguard vs. Blackrock funds, let’s first cover some of the terminologies. Even in the personal finance space, I occasionally remind myself of the differences between index funds, exchange-traded funds (ETFs), and mutual funds.

An index fund is a type of mutual fund or ETF, though the unique aspect always matches the components of an index or specific financial market. Index funds represent a theoretical segment of the market and aim to match the risk and reward of a specific need.

Index Funds

An exchange-traded fund (ETF) typically matches an index similar to index investing. However, an ETF can trade on an exchange, one of the most significant differences between an ETF and an index fund.

Exchange-Traded Funds (ETF)

Index funds and ETFs are both mutual funds. However, mutual funds can be much broader than passively managed index funds or ETFs.

Mutual Funds

Your decision on where to invest your money may come down to other factors such as the convenience of their platform or other services on how you use either company.  There may be some Blackrock funds that have higher expense fees than Vanguard, so you’ll want to ensure you’re reviewing fees for any fund where you decide to invest.

Should You Invest in Vanguard or Blackrock Funds?

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