Vanguard fund fees?

i would like to setup a fund with vangaurd so I can invest every month without paying brokerage fees. Is there a $20 annual cost if I sign up for their e-service package? Are there any fee's aside from the expense ratio and the taxes I will incur?

Am I better off investing in ETF's?

You are right that Vanguard waives the $20 per year fee if you register at www.vanguard.com and sign up for e-delivery. If you take the trouble to do this, almost all of Vanguard's funds will have no cost except for their (very small) expense ratios and any taxes you may incur.

There are a few exceptions, however, so you should check the details of the fund you plan to buy. One example is Vanguard's emerging market fund. It charges half a percent fees on all purchases and redemptions. The rationalization, I suppose, is the high cost of investing in emerging markets. Still it's a definite departure from Vanguard's typical business model of no-load funds and rock bottom fees.

If you want to contribute monthly, stick with the mutual fund instead of ETFs. You have to pay a brokerage fee every time your purchase an ETF. Vanguard is excellent - good management and low fees.

There shouldn't be. Some funds have a front end charge (which goes to the fund so it isn't classified as a fee) and others have a redemption charge if you redeem within a certain timeframe.

You should check their web site and click on research funds. Choose Vanguard funds (in a brokerage they have other funds available).

If you click on the fund you are interested in there is a choice for "fees and mimimums?" or something close to that. That will outline all the fees and minimums for you.

The one "expense" that no fund shows with the expense ratio is the commissions it pays to buy and sell securities for the fund. For index funds that is minimal for an actively traded fund it can be 80 basis points (each point is 100th of a percent). So an actively traded fund with an expense ratio of 1.00 might actually shave 1.80% off the funds total return. Where an index fund with an expense ratio of .25 which is low might only have an additional 20 basis points or for commissions since it is not actively traded. So, the benefit for indexing is more than just a straignt comparison between expense ratios.