Invest in Vanguard Total Stock Market ETF for Complete Stock Portfolio Diversification
Why choose the Vanguard Total Stock Market ETF?
This particular ETF is designed to give investors exposure to the entire U.S. equity market, including small-, mid-, and large-cap growth and value stocks. Its broad diversification and low expense ratio make it an attractive option for both novice and experienced investors.
Expense ratio
The Vanguard Total Stock Market ETF sports an incredibly low expense ratio of 0.03%, significantly lower than the category average of 0.79%. This means more of your investment goes toward growing your capital rather than paying fund management fees.
10-year return average
Over the past decade, this ETF has delivered an average annual return of 11.77%. While the Vanguard S&P 500 ETF outperformed it over this period, it didn't do so by a wide margin.
Risk profile
The Vanguard Total Stock Market ETF carries a risk level of 4 on a scale of 1 to 5, indicating a higher risk potential compared to bonds and fixed-income instruments, but also offering the possibility for higher returns typical for stock market investments.
Top five holdings and their weights
- Microsoft -- 6.12%
- Apple -- 4.93%
- Nvidia -- 4.20%
- Amazon -- 3.30%
- Meta Platforms -- 2.09%
Sector weightings
- Technology (32.1%)
- Consumer discretionary (14.2%)
- Industrials (13.1%)
- Healthcare (11.9%)
- Financials (11%)
Final thoughts
This ETF screens as an excellent choice for investors preferring a hands-off approach to stock market investing. Whether starting out or looking to simplify investment strategy, the Vanguard Total Stock Market ETF is a suitable core holding offering a straightforward path to participating in U.S. market growth. Investing in low-cost ETFs like this can help mitigate risks associated with individual stock selection while providing opportunity for capital growth.
This article was prepared using information from open sources in accordance with the principles of Ethical Policy. The editorial team is not responsible for absolute accuracy, as it relies on data from the sources referenced.