Final answer:
The minimum investment for the Vanguard 500 Index Fund Admiral Shares is $3,000. This fund offers investors low-cost access to the large-cap segment of the U.S. stock market by mirroring the S&P 500 Index, and further purchases have no minimum after the initial investment.
Step-by-step explanation:
The minimum investment for the Vanguard 500 Index Fund Admiral Shares (VFIAX) is an initial amount of $3,000. The Vanguard 500 Index Fund Admiral Shares are designed to provide investors with exposure to the large-cap equity segment of the U.S. stock market by tracking the performance of the S&P 500 Index, which is composed of 500 of the largest U.S. companies. In offering Admiral Shares, Vanguard aims to provide a low expense ratio option for investors, but this tier of service requires a higher minimum investment than the Investor Shares counterpart. Once the initial investment threshold is met, additional purchases can be made with no minimum amount.
It is important for investors to note that the Vanguard 500 Index Fund Admiral Shares have a lower expense ratio compared to the Investor Shares, due mainly to the higher minimum investment requirement. While the minimum investment threshold may be a barrier for some, the long-term cost savings in expense ratios can be significant, making the Admiral Shares a more cost-effective option for those able to meet the initial investment criteria. The fund provides a diversified exposure to U.S. equity markets, and it is often recommended for investors seeking a passive investment strategy that mirrors the performance of a broad market index.