By investing in the Vanguard Total Stock Market Index Fund (VTSAX), you can get exposure to the entire US equity market, including small, mid, and large-cap growth and value stocks.
If you are a beginner and looking to invest in the US stock market, there are several stocks with varying market capitalization and from different industries to choose from. However, selection and investing in the right US stock may not be as easy as it looks. Here’s a better option to take exposure in the entire US stock market in one-go. By investing in the Vanguard Total Stock Market Index Fund Admiral Shares (VTSAX), you can get exposure to the entire US equity market, including small, mid, and large-cap growth and value stocks. The fund is also available as an exchange traded fund (ETF) called Vanguard Total Stock Market ETF (VTI). The Vanguard total world stock ETF or the Vanguard total stock market ETF, as it is popularly called, is also referred to as the VTI stock by several investors. From Nasdaq 100, Dow 30, Russell 2000 to S&P 500 stocks, VTI gives you exposure to over 3900 stocks of the US stock market.
Performance: Vanguard Total Stock Market ETF (VTI) tracks the performance of the US Total Market Index and follows a passively managed, index-sampling strategy. VTI is currently trading at around $234, up by nearly 33 per cent over the last 1-year.
The performance of VTI has been close to its benchmark over longer periods. The 3-year, 5-year and 10-year return as on August 31, 2021 has been 17.90 per cent, 18 per cent and 16.20 per cent respectively.
Top Sectors: Investors looking for a low-cost way to gain broad exposure to the U.S. stock market and who are willing to accept the volatility that comes with stock market investing may consider investing in the Vanguard Total Stock Market ETF (VTI). Technology, Consumer Discretionary, Industrials, Health Care and Financials make up the five largest sectors for VTI.
Top Holdings: As of July 31, 2021, the top 10 largest holdings of Vanguard Total Stock Market ETF (VTI) totals about 23.60% of total net assets of the fund and includes, Apple Inc., Microsoft Corp., Alphabet, Amazon.com Inc., Facebook Inc., Tesla Inc,, Berkshire Hathaway Inc., NVIDIA Corp., JPMorgan Chase & Co and Johnson & Johnson.
Vanguard Total Stock Market ETF (VTI) is known for its low-cost and the diversification that it provides across 11 major sectors in the US economy. As on April 29, 2021, the expense ratio was 0.03%, the lower the ratio the better it is for the investors.
Portfolio composition: Total Stock Market ETF is benchmarked against the US Total Market Index. As of 07/31/2021, the portfolio was diversified across these industries:
Technology: 27.60 %
Consumer Discretionary: 15 %
Industrials: 13.9 %
Health Care: 13.2 %
Financials: 10.9 %
Consumer Staples: 4.7 %
Energy: 2.6 %
Real Estate: 3.6 %
Basic Materials: 2 %
Telecommunications: 3 %
Utilities: 2.7 %
ETF’s are low-cost ways of owning various stocks across different industries of the same index. VTI, also an ETF, gives investors an exposure to the entire spectrum of US stocks in one-go. While the returns will be in line with the market, the potential to generate an alpha may not exist in ETF’s including VTI as the diversification is considerably more in them. VTI can still be a part of your long term portfolio of US stocks for a much steady return.
Disclaimer: The investing decision in these or any other stock should be taken on your own after carefully evaluating the business and other fundamentals of the company or after consulting one’s financial advisor. It is not a recommendation to buy, hold or sell in any of the stocks. Financial Express Online does not bear any responsibility for their investment advice.