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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.
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