Vanguard Total World Index Explained [VTWAX | VT ETF]
Vanguard Total Stock Market Index Fund Fact Sheet
The Vanguard Total Stock Market Index Fund is a passively managed exchange-traded fund (ETF) that tracks the performance of the entire U.S. stock market. It is one of the most popular ETFs, with an average daily trading volume of more than $4 billion. The fund is designed to track the performance of the CRSP US Total Market Index, which is a broad market index that covers the entire U.S. stock market. As such, the fund’s holdings include large-cap, mid-cap, and small-cap stocks from all sectors of the U.S. economy.
The Vanguard Total Stock Market Index Fund seeks to track the performance of the CRSP US Total Market Index by investing in all of the stocks that make up the index. The fund invests in a representative sample of stocks that, in the aggregate, approximates the full index in terms of key characteristics such as market capitalization, sector, industry, and region. The fund is rebalanced and reconstituted quarterly in order to maintain its tracking accuracy and to reflect the changing composition of the index.
The fund’s expense ratio is 0.03%, which means that it is one of the least expensive ETFs on the market. This low expense ratio makes the fund an attractive option for investors who are looking to invest in the U.S. stock market without paying a lot of fees. Additionally, the fund’s low turnover rate (1.03%) means that it is a relatively tax-efficient fund.
The Vanguard Total Stock Market Index Fund is a great choice for investors who are looking for a low-cost and tax-efficient way to invest in the entire U.S. stock market. The fund is passively managed, which means that it is designed to track the performance of the market, rather than trying to beat it. This makes the fund a great choice for investors who are seeking a long-term investment strategy.
Key Points:
• The Vanguard Total Stock Market Index Fund is a passively managed ETF that tracks the performance of the entire U.S. stock market.
• The fund is designed to track the performance of the CRSP US Total Market Index, which is a broad market index that covers the entire U.S. stock market.
• The fund’s expense ratio is 0.03%, which makes it one of the least expensive ETFs on the market.
• The fund’s low turnover rate (1.03%) means that it is a relatively tax-efficient fund.
• The Vanguard Total Stock Market Index Fund is a great choice for investors who are looking for a low-cost and tax-efficient way to invest in the entire U.S. stock market.
People Also Ask Questions and Answers:
Q: What is the Vanguard Total Stock Market Index Fund?
A: The Vanguard Total Stock Market Index Fund is a passively managed exchange-traded fund (ETF) that tracks the performance of the entire U.S. stock market.
Q: What is the expense ratio for the Vanguard Total Stock Market Index Fund?
A: The fund’s expense ratio is 0.03%, which makes it one of the least expensive ETFs on the market.
Q: Is the Vanguard Total Stock Market Index Fund a good choice for investors?
A: Yes, the Vanguard Total Stock Market Index Fund is a great choice for investors who are looking for a low-cost and tax-efficient way to invest in the entire U.S. stock market.
Vanguard Total Stock Market Index Fund Fact Sheet – Highest Rated?
The Vanguard Total World Stock Index (VT ETF | VTWAX) has over 9,000 stocks across 49 markets! We discuss the details and pros/cons of using this index versus investing in US and International indexes separately.
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— Follow up Videos:
Should You Invest in International Stocks? https://youtu.be/vd_KcudZo3U
Tax-Efficient Asset Allocation [5 Steps to Avoid Taxes] https://youtu.be/5t7IRZVKkNE
S&P 500 vs Total Stock Market? https://youtu.be/FhTR93AsELA
Three-Fund Portfolio [The BEST Portfolio!] https://youtu.be/R81Z-obeB3s
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— Links
VTWAX Prospectus: https://personal.vanguard.com/us/faces/JSP/Funds/ProspRep/FundProspectusReportsWinJSP.jsp?fundId=5028&isReqFromProducts=true
FTSE Global All Cap Index Fact Sheet: https://research.ftserussell.com/Analytics/Factsheets/Home/DownloadSingleIssue?issueName=GEISLMS&IsManual=false
US Code (Foreign Tax Credit):
https://www.law.cornell.edu/uscode/text/26/853
— Outline
00:00 Intro
The Vanguard Total World Stock Index (VT ETF | VTWAX) has exposure to over 9,000 stocks across 49 markets around the world! We discuss the details and pros/cons of using this index versus investing in US and International Indexes separately.
00:59 Principal Investment Strategies
This fund tracks the FTSE Global All Cap Index. This is a market-cap weighting index representing performance of large, medium, and small companies in both developed and emerging markets. We discuss what this means.
03:10 Principal Risks
This fund has several risks outlined in the prospectus. We discuss some of these risks.
04:05 Portfolio Composition
We take a look at the construction of the portfolio, including: regional allocations, country allocations, and top companies.
05:09 Expense Ratio
The expense ratio of VTWAX is 0.1%, which is $1 per year for every $1,000 invested. VT ETF is 0.08% which is $0.80 for every $1,000.
05:51 Performance
Since the VT ETF was created in 2008, it has delivered an annualized return of 7.69%. The 10 year annual return is 9.46%. We look at how this compares to the US Stock Index (VTSAX / VTI).
07:04 Principles of Index Investing
We briefly discuss the core principles of index investing, which are relevant to a global market-cap weighting.
08:14 Pros & Cons
We discuss the pros and cons of using this single Total World Stock Index.
13:39 VTWAX != VTSAX + VTIAX (VT != VTI + VXUS)
While you could invest in separate US & International indexes, they aren’t EXACTLY the same as VTWAX.
14:50 My Thoughts
I think the choice of using the Total World Stock Index versus separate US and International Indexes boils down to optimizing for time or a possible slightly higher return. I explain why I have this opinion and the decision I made for my portfolio.
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Disclaimer: I am not a financial advisor. My videos are for educational purposes and are my opinions. You should seek advice from a professional advisor or perform your own research. There is no guarantee you will be successful following my opinions.
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