SWTSX has a 5-year annualized total return of 14.2% and is in the middle third among its category peers. Investors who prefer analyzing shorter-term performance may find this figure appealing. When you invest in a total stock market index fund, you are adding exposure to the entire U.S. equity market to your portfolio. This type of investment can provide broad diversification and potentially reduce risk compared to investing in individual stocks.
The standard deviation of SWTSX over the past three years is 18.24% compared to the category average of 17.68%. Over the past 5 years, the fund has shown steady performance with consistent returns. When you invest in a total stock market index fund, you are essentially buying a particular slice of the stock market, and not just one or a few individual companies. This can help spread out risk and capture the overall market's performance.
These portfolios feature some of the best no-load, No Transaction Fee funds on Schwab's platform. The Vanguard Total Stock Market Index Fund is a wonderful mutual fund. Excellent returns, low costs, and a rock-solid strategy should cause investors to take notice. When building a portfolio, a passive approach that features index funds could work in investors' favor. "Index funds are a low-cost and efficient way to gain exposure to a broad market," says a financial advisor.