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- This ETF reflects the larger universe of U.S. equities in a low-cost single fund.
- Two common recommendations are the Vanguard Total Stock Market ETF (VTI 1.53%) and the Vanguard S&P 500 ETF (VOO 1.54%).
- The fund has over 3,750 stocks in its portfolio, a massive amount for an ETF.
A one-stop shop for all U.S. stocks.
The fund tracks the performance of the CRSP US Total Market index, which includes 3,674 individual stocks, offering unparalleled diversification within Vanguard’s rather broad fund family. For those seeking a simpler approach, Vanguard offers a compelling solution with its suite of 86 exchange-traded funds (ETFs). The Total Stock Market fund tracks the CRSP US Total Market Index, which captures practically every investable U.S. stock in the market. The S&P 500 ETF tracks the S&P 500, which is a collection of about 500 of the largest U.S. companies that have been consistently profitable for at least a year. Investment objectives, risks, charges, expenses, and other important information are contained in the prospectus; read and consider it carefully before investing.
Will VTI outperform in future?
The fund has over 3,750 stocks in its portfolio, a massive amount for an ETF. The median market cap of the fund’s holdings is $149.3 billion. The weighted average price-to-earnings (P/E) ratio for the portfolio is 22.9, with a price-to-book (P/B) ratio of 3.9. The P/E ratio takes the current market value of companies’ shares divided by the earnings per share (EPS). The P/B ratio takes the share price divided by the total liabilities minus intangible assets and liabilities. This ETF is crafted to provide investors exposure to the entire U.S. equity market, encompassing small-, mid-, and large-cap growth and value stocks.
Better Buy: Vanguard Total Stock Market ETF or Vanguard S&P 500 ETF?
Whether you should buy it depends on your investment goals. Simplify your investment strategy with the Vanguard Total Stock Market ETF. Get our overall rating based on a fundamental assessment of the pillars below.
Its broad diversification and low expense ratio make it an attractive choice for both beginners and seasoned investors. The Vanguard Total Stock Market ETF is a popular way to save for retirement or long-term growth. The fund represents a snapshot of the stock market, allowing investors to track the gains of the market as a whole rather than invest in individual shares.
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That leaves 14% of the Total Stock Market ETF invested in stocks outside of the S&P 500. These are mid- and small-cap stocks, or large companies that have yet to meet the profitability criteria for inclusion in the S&P 500 index. That amount of diversification is not insignificant, but it’s not going to push the Total Stock Market ETF returns too far from the returns of the S&P 500 ETF. For investors, the main consideration between VOO and VTI is how much exposure to large-cap stocks versus all the stock sizes offered on stock exchanges. While the ETF’s goal of, basically, owning every stock you could possibly buy is simple, it won’t fit the needs or desires of every investor. As a quick example, Vanguard Total Stock Market ETF’s dividend yield is around 1.4%.
The Motley Fool has positions in and recommends Vanguard Index Funds-Vanguard Total Stock Market ETF and Vanguard S&P 500 ETF. At the end of the day, either or both funds can make a great cornerstone to your portfolio. Overall, 86% of the Total Stock Market ETF overlaps with the holdings in the S&P 500 ETF. As a result, the returns you can expect are very similar and highly correlated. Yes, VTI pays a dividend every three months, with an annual dividend yield of 1.38%. The last dividend payment was paid out on Dec. 21, 2023, with a dividend of $1 per share.
You still have some choices to make when placing your order. Reuben Gregg Brewer has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Vanguard Index Funds-Vanguard Total Stock Market ETF. There’s nothing wrong with Vanguard Total Stock Market ETF. It does exactly what it sets out to do, and it does so in a very cost-effective manner. The big thing that you need to figure out is whether what this ETF does actually works for your needs and, perhaps just as important, with your personality.
Use our online tools to get the information you’re looking for. You probably won’t be happy owning Vanguard Total Market ETF because it simply won’t fit your investment temperament. Transparency is how we protect the integrity of our work and keep empowering investors to achieve their goals and dreams. And we have unwavering standards for how we keep that integrity intact, from our research and data to our policies on content and your personal data. The Vanguard Total Stock Market ETF tracks the CRSP U.S. Total Market Index and holds 3,674 stocks at the time of writing. Deciding on a stock or ETF is the first step to broadening your portfolio.
Like many other index ETFs, it has an extremely low expense ratio, because its management costs are lower than actively managed funds. And then you need to consider the weighting methodology. While market-cap weighting is fairly common, it isn’t the only option. Some investors prefer equal weighting, meaning all holdings can contribute equally to performance. Some dividend ETFs, meanwhile, are weighted based on dividend yield.
The total assets in the Vanguard Total Stock Market ETF (VTI), as of Feb. 11, 2024. Top website in the world when it comes to all things investing. Here’s a look at the current performances of VOO vs. VTI and how the two ETFs stack up against SPY, which is one of the largest ETFs and the first U.S. Whether you already have a Vanguard Brokerage Account or need to open one, it’s easy to invest online. Vanguard Total Stock Market is a simple ETF to understand.
See the Vanguard Brokerage Services commission and fee schedules for full details. Find out the past dividends of a stock, ETF, or mutual fund before you invest. The Vanguard Total Stock Market Index Fund ETF features an exceptionally low expense ratio of 0.03%, significantly below the category average of 0.78%. This key feature allows you to keep more money in your account rather than giving it to a money manager. Investing in stocks can be challenging, especially when it comes to selecting individual companies.
The Vanguard Total Stock Market ETF is an open-ended fund issued by Vanguard and advised by the Vanguard Equity Investment Group. The fund is a passive index fund and therefore has a remarkably low expense ratio of 0.03%. The fund has a relatively low turnover rate of 8%, meaning that there are limited transaction costs for changing the fund’s holdings. The expense ratio does not include any commissions or brokerage fees. The low expense ratio is beneficial for long-term investors in the fund. The VOO is weighted by market capitalization for the 500 largest U.S. public companies, while the VTI includes stocks outside the S&P 500.
If you are trying to build a portfolio that generates income you can live on in retirement, well, that won’t get you very far. You’ll be better off looking at equity ETFs focused on owning dividend stocks. This allocation strategy aligns with the fund’s goal of balancing value creation and risk management. It’s worth noting that the fund has increasingly tilted toward the high-growth technology sector in 2024, mirroring the market’s enthusiasm for artificial intelligence.