Founded in by brothers Tom and David Gardner, The Motley Fool helps millions of people attain financial freedom through our website, podcasts, books, newspaper column, radio show, and premium investing services.

Vanguard Total Stock Index Vs. Vanguard Index Fund | Investopedia

The Vanguard Total Stock Market ETF NYSEMKT: VTI is a primarily market cap-weighted index that's designed to track the CRSP US Total Market Index. It is one of the best ways to buy a broadly diversified portfolio of American stocks and pay mere pennies in fees and expenses. The case for most Vanguard funds is that they're simply cheap.

When John Bogle founded Vanguard, he structured it so that that investors who invest in Vanguard's funds own the management company.

VXUS Fund - Vanguard Total International Stock ETF Overview - MarketWatch

Thus Vanguard has no profit motive, allowing it to operate with the sole goal of providing low-fee funds to its customers. Carrying an expense ratio of just 0. By definition, Vanguard's Total Stock Market Index ETF has to be diversified because At the time of writing, Vanguard's fund held 3, individual stocks, making it one of the most diverse funds available.

The fund isn't managed by stock pickers -- it just tracks an index.

As a result, it trades stocks infrequently, turning over just 3. Infrequent trading results in fewer taxable capital gains, making it an ETF that is perhaps better suited for taxable investment accounts than other actively managed stock funds.

Doing what the cool kids are doing is a bad investment strategy, but that's not always the case when it comes to ETFs. Because more than 2. Investors often pay too little attention to premiums and discounts for ETFs. Some less-popular ETFs can trade at premiums to net asset value, meaning that investors end up paying more for an ETF than its assets are actually worth. Premiums and discounts to NAV are generally more of a concern for funds that hold foreign stocks. Luckily, the Total Stock Market Index is an American index.

The majority of stock market value can be attributed to a minority of stocks listed on American exchanges. And while there is no guarantee that small caps will always outperform large cap stocks, history provides evidence that, over long periods of time, they generally do.

Jordan Wathen has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

The Motley Fool has a disclosure policy. Jordan is a value investor who believes incentives matter. Moats, floats, and compelling valuations.

Skip to main content The Motley Fool Fool. Premium Advice Help Fool Answers Contact Us Login. Latest Stock Picks Stocks Premium Services. Stock Advisor Flagship service.

Rule Breakers High-growth stocks. Income Investor Dividend stocks.

Hidden Gems Small-cap stocks. Inside Value Undervalued stocks. Learn How to Invest. Credit Cards Best Credit Cards of Best Credit Card Sign-Up Bonuses Best Balance-Transfer Credit Cards Best Travel Credit Cards Best Cash-Back Credit Cards Best No-Annual-Fee Credit Cards Best Small Business Credit Cards.

Mortgages Compare Mortgage Rates Get Pre-Approved How Much House Can I Afford? Taxes How to Reduce Your Taxes Deductions Even Pros Overlook Audit-Proof Your Tax Return What Info Should I Keep? Helping the World Invest — Better. How to Invest Learn How to Invest. Personal Finance Credit Cards Best Credit Cards of Best Credit Card Sign-Up Bonuses Best Balance-Transfer Credit Cards Best Travel Credit Cards Best Cash-Back Credit Cards Best No-Annual-Fee Credit Cards Best Small Business Credit Cards.

Jun 29, at 3: Vanguard Total Stock Market ETF NYSEMKT: Prev 1 2 3 4 Next. Motley Fool push notifications are finally here Allow push notifications to help you stay on top of Breaking investing news Earnings coverage Market movers Special offers and more Subscribe to notifications You can unsubscribe at any time.