By Dr. Leif Dahleen of Physician on Fire, WCI Network Partner. The Vanguard Total Stock Market Fund (ticker symbol VTSAX) gets a lot of attention from investors, and for good reason. This mutual fund is a smart choice for those looking for a diversified investment in the U.S. stock market. In this article, we'll dive into the details of VTSAX, explore its benefits, and compare it to other popular mutual funds in the market.
Vanguard index funds kicked off the passive-investing revolution. Some of the most popular are VFIAX, VTSAX and VBTLX. These index funds are designed to track the performance of the market, rather than trying to beat it. And while index funds have been around for decades, they have become increasingly popular in recent years due to their low fees and strong performance compared to actively managed funds.
In the U.S., Vanguard offers 204 funds with an average 2022 asset-weighted expense ratio of 0.08%, a testament to its commitment to low fees. VTSAX is one of the most popular of these funds, with over $1 trillion in assets under management. It tracks the performance of the CRSP US Total Market Index, which includes nearly all publicly traded U.S. companies.
VTSAX and VTI are two total market index funds, meaning that they track the overall performance of the U.S. stock market. However, there are some key differences between the two funds. VTI is an exchange-traded fund (ETF), while VTSAX is a mutual fund. VTI has a lower expense ratio (0.03% compared to VTSAX's 0.04%), but VTSAX has no minimum investment requirement, while VTI requires investors to purchase at least one share.
FSKAX and VTSAX are two popular mutual funds offered by Fidelity and Vanguard, respectively. Learn the differences between the two funds. FSKAX tracks the performance of the Dow Jones U.S. Total Stock Market Index, which includes more than 3,500 U.S. companies. FSKAX has a slightly lower expense ratio than VTSAX (0.015% compared to 0.04%), but it also has a higher minimum investment requirement ($2,500 compared to VTSAX's no minimum).
Too busy to mind your portfolio? Three basic building blocks provide you with all the diversification you need. VTSAX is one of these building blocks. It provides a simple, low-cost way to invest in the entire U.S. stock market. By investing in VTSAX, you can be confident that you are getting exposure to all sectors of the U.S. economy, from technology to healthcare to consumer goods.
The Roth IRA is widely lauded as one of the best ways to save for retirement, and for good reason. While the contribution limits are fairly low (just $6,000 per year), the tax benefits are significant. And if you're looking to invest in a Roth IRA, VTSAX is a smart choice. By investing in VTSAX within your Roth IRA, you can take advantage of the fund's strong performance and low fees, while also enjoying tax-free growth and withdrawals in retirement.
If you own more than one Vanguard stocks ETFs (or funds), they may not have been able to escape the downdraft this year. However, it's important to remember that short-term market fluctuations are just that - short-term. Over the long-term, VTSAX has shown strong performance and is a smart choice for investors looking for a diversified investment in the U.S. stock market.
In conclusion, Vanguard Total Stock Market Index Admiral (VTSAX) is a top choice for mutual fund equity investors. With low fees, strong performance, and broad exposure to the U.S. stock market, VTSAX provides a simple, effective way to invest in the market. Whether you're a seasoned investor or just starting out, VTSAX is a smart choice for your portfolio.
Ticker: VTSAX, FSKAX, VTI
