Vanguard Total Stock Index Fund (VTI): A Comprehensive Guide for Investors

Introduction

The Vanguard Total Stock Index Fund (VTI) is an exchange-traded fund (ETF) that seeks to track the performance of the entire U.S. stock market. Launched in 2001, VTI has become one of the most popular ETFs for investors seeking diversification, low cost, and broad market exposure.

Key Features of VTI

• Investment Objective: To track the investment results of the CRSP US Total Market Index, which represents approximately 99% of the U.S. stock market.
• Ticker Symbol: VTI
• Expense Ratio: 0.03%, one of the lowest in the ETF industry.
• Assets Under Management (AUM): Over $1 trillion
• Number of Holdings: Approximately 3,600 U.S. stocks
• Dividend Yield: Around 1.5%, which is slightly below the market average.

Historical Performance

VTI has a solid track record of delivering returns in line with the overall stock market. Over the past 10 years, VTI has generated an average annual return of 10.3%, compared to 9.8% for the S&P 500 index.

Sector and Industry Exposure

VTI provides investors with exposure to a wide range of sectors and industries within the U.S. stock market. As of March 31, 2023, VTI's top five sectors were:

Top 10 Holdings

VTI's top 10 holdings include some of the largest and most recognizable companies in the U.S., such as:

Suitability for Investors

VTI is a suitable investment for investors who:

• Seek broad market exposure
• Are willing to tolerate market volatility
• Have a long-term investment horizon
• Are looking for a low-cost and tax-efficient investment

Alternatives to VTI

There are several other ETFs that offer exposure to the entire U.S. stock market, including:

Pros and Cons of VTI

Pros:

• Low expense ratio
• Broad market exposure
• High liquidity
• Tax-efficient

Cons:

• Lower dividend yield than some other ETFs
• May not provide enough diversification for some investors
• Can be volatile in the short term

Conclusion

The Vanguard Total Stock Index Fund (VTI) is a well-diversified, low-cost ETF that provides investors with exposure to the entire U.S. stock market. It is a suitable investment for investors with a long-term investment horizon and a tolerance for market volatility. However, investors should consider their individual investment goals and risk tolerance before investing in VTI.