Exchange Traded Funds (ETFs)

Explore Low-Cost Fund Options with Vanguard

The Vanguard Total Stock Market ETF (VTI) represents the biggest Vanguard exchange-traded fund (ETF) in terms of total assets, which are valued at nearly $87 billion.

As one of the most well-known ETF managers, Vanguard has revolutionized the ETF space by offering some of cheapest-to-own index funds in the business to make Vanguard attractive to investors who want to allocate their money and then forget about it for years. For example, an Investopedia article published in early 2016 found that if two of the largest and best total stock market funds, VTI and IWV (the iShares Russell 3000 ETF), were given a head-to head-comparison, IWV’s expense ratio of 0.20% was 4x that of VTI’s current 0.05% ratio.

While inexpensive Vanguard funds are great for long-term investing, they are also an interesting option for more active traders. Investors who are interested in the approach of owning a basket of companies via an ETF, but who are put off by high expenses, can find a wide variety of options to suit their needs through Vanguard.

Specifically, VTI is a broad-based fund that is designed to emulate the performance of the entire U.S. stock market. For this reason, it can be used as a good benchmark. The fund includes large-, small- and mid-cap stocks, as well as a nice blend of value and growth plays.

There are other funds out there that are useful as general market investments, but few have the low expense ratio boasted by this fund. In fact, currently at 0.04%, there are few funds on the market that are cheaper, period. Over the last 12 months, VTI has returned 21.57%. This is just a little more than the S&P 500 returned in the same period, which makes sense as the two measures are similar. VTI pays a dividend of slightly less than 2%.

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Top holdings for this fund include Apple Inc. (AAPL), 2.7%; Microsoft Corp. (MSFT), 2.2%; Alphabet Inc. (GOOGL), 2.2%; Facebook Inc. (FB), 1.5%; and Amazon.com Inc. (AMZN), 1.5%. The top 10 holdings represent 17.4% of the fund’s assets.

For investors looking for ways to invest in a large basket of companies across the expanse of the stock market, and at a low price, the Vanguard Total Stock Market ETF (VTI) could be a leading contender.

Jim Woods

Jim Woods is a 20-plus-year veteran of the markets with varied experience as a broker, hedge fund trader, financial writer, author and newsletter editor. Jim is the editor of Successful Investing, the Bullseye Stock Trader, and The Deep Woods (formerly the Weekly ETF Report). His books include co-authoring, “Billion Dollar Green: Profit from the Eco Revolution,” and “The Wealth Shield: How to Invest and Protect Your Money from Another Stock Market Crash, Financial Crisis or Global Economic Collapse.” He’s also ghostwritten many books and articles, as well as edited content for some of the investment industry’s biggest luminaries. His articles have appeared on many leading financial websites, including StockInvestor.com, InvestorPlace.com, Main Street Investor, MarketWatch, Street Authority, Human Events and many others. Jim formerly worked with Investor’s Business Daily founder William J. O’Neil, helping to author training courses in the CANSLIM stock-picking methodology. The independent firm TipRanks rates Jim the No. 3 financial blogger in the world (out of more than 6,000). TipRanks calculates that, since 2012, he's made 361 successful recommendations out of 499 total, earning a success rate of 72% and a +15.3% average return per recommendation. He is known in professional and personal circles as “The Renaissance Man,” because his expertise includes such varied fields as composing and performing music; Western horsemanship, combat marksmanship, martial arts, auto racing and bodybuilding. Jim holds a BA in philosophy from the University of California, Los Angeles, and is a former U.S. Army paratrooper. A self-described “radical for capitalism,” he celebrates the virtue of making money from his Southern California horse ranch.