An ETF to Match the Market
Vanguard Total Stock Market owns almost every publicly traded U.S. company worth at least $10 million.
If you just wanted to duplicate the U.S. stock market, you’d buy a fund that mimics Standard & Poor’s 500-stock index, right? Well, not exactly. The S&P index consists of 500 companies, most of them large. If you wanted to track the entire U.S. stock market, you’d need to own a fund that follows a total-market index.
Why not stick with the familiar 500? Because a total-market index holds more small and midsize companies, and over the long term those stocks have performed better than big-company stocks. Over the past 15 years, including so far in 2013, the Wilshire 5000 Total Market index, the best-known of the broad-market indexes, has beaten the S&P 500 11 times.
Vanguard Total Stock Market ETF (VTI), the largest of the all-market exchange-traded funds, marches to a different beat. In June 2013, Vanguard switched from tracking one less-popular benchmark, the MSCI US Broad Market index, to another, the CRSP U.S. Total Market index. Vanguard said at the time that the move would allow it to cut fees on Total Stock Market ETF, which today charges a microscopic 0.05% per year in expenses.
From just $107.88 $24.99 for Kiplinger Personal Finance
Become a smarter, better informed investor. Subscribe from just $107.88 $24.99, plus get up to 4 Special Issues
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
The ETF holds 3,639 stocks, representing nearly all U.S.-based firms with market values of at least $10 million. According to Morningstar, 19% of its assets are in midsize companies, 6% in small companies and 2% in “micro caps.” The ETF’s biggest holding is Apple; the smallest, Allen Organ.
-
4 Great Tools to DIY Your Own Financial PlanSmart Savings Several tools picked out by Kiplinger that DIYers can use to make their own financial plan.
-
The 7-Month Deadline That Sets Your Lifetime Medicare PremiumsUnderstanding Medicare enrollment is crucial, as missing deadlines can lead to permanent late enrollment penalties and gaps in coverage.
-
Retirees Living in Portugal: You Need a Post-NHR Tax StrategyWhen your 10-year Non-Habitual Resident tax break ends, you could see your tax rate soar. Take steps to plan for this change well before the NHR window closes.
-
Stocks Chop as the Unemployment Rate Jumps: Stock Market TodayNovember job growth was stronger than expected, but sharp losses in October and a rising unemployment rate are worrying market participants.
-
Stocks Struggle Ahead of November Jobs Report: Stock Market TodayOracle and Broadcom continued to fall, while market participants looked ahead to Tuesday's jobs report.
-
AI Stocks Lead Nasdaq's 398-Point Nosedive: Stock Market TodayThe major stock market indexes do not yet reflect the bullish tendencies of sector rotation and broadening participation.
-
Dow Adds 646 Points, Hits New Highs: Stock Market TodayIt was "boom" for the Dow but "bust" for the Nasdaq following a December Fed meeting that was less hawkish than expected.
-
Dow Rises 497 Points on December Rate Cut: Stock Market TodayThe basic questions for market participants and policymakers remain the same after a widely expected Fed rate cut.
-
JPMorgan's Drop Drags on the Dow: Stock Market TodaySmall-cap stocks outperformed Tuesday on expectations that the Fed will cut interest rates on Wednesday.
-
Stocks Slip to Start Fed Week: Stock Market TodayWhile a rate cut is widely expected this week, uncertainty is building around the Fed's future plans for monetary policy.
-
Stocks Keep Climbing as Fed Meeting Nears: Stock Market TodayA stale inflation report and improving consumer sentiment did little to shift expectations for a rate cut next week.
