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My Goal is simple:

  1. Contribute X amount every month to some Y Vanguard ETF
  2. Put it on autopilot (Automatic investment) without having any transaction fees.

Since Vanguard does not charge any money for buying Vanguard ETFs from the Vanguard Website, I thought that it would make perfect sense to set up Automatic ETF purchase every month from the Vanguard Website. However, it turned out that Vanguard ONLY provides the automatic transaction for Mutual Funds and NOT for ETFs.

I am not sure what are my other options. I checked with Robinhood and sounds like they do not have any automatic investment options.

Any suggestions?

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  • Do you have reasons for not doing the open-end mutual fund option? Those would be better as don't forget that you also need fractional shares as your purchase of X amount would likely be a round dollar amount that isn't going to equal Z shares precisely often.
    – JB King
    Dec 21 '15 at 23:55
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    The reason it's difficult to have auto-investment for ETFs is that you can't generally buy fractional shares of an ETF. So if you want to invest $100 and the ETF costs $150 per share, you can't buy any; if it costs $75, you can buy one but have $25 left over. If you want to do auto-investing by dollar amount, mutual funds may be a better choice for this reason.
    – BrenBarn
    Dec 22 '15 at 1:41
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    Dividend reinvestment plans generally allow for fractional shares of stock. There's no reason in principle that there couldn't be something similar for an ETF. I don't think your reason is valid, even if it turns out to be true that no one is currently doing it for ETFs. @BrenBarn
    – user32479
    Dec 22 '15 at 3:47
  • Since it sounds like you're basically looking for "set it and forget it" investing, why not just go with the mutual funds?
    – Daniel
    May 31 at 11:53
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Yes, you can do that in Robinhood. Robinhood supports automatic investment in ETF as well as fractional shares for ETF.

Beware that (to my best knowledge) Robinhood does not have an operating customer support phone number. If you run into any technical issue it may be a challenge to get support.

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