ETF Spotlight on Vanguard Total Stock Market ETF (VTI), part of an ongoing series.
Assets: $21.5 billion.
Objective: The Vanguard Total Stock Market fund tries to reflect the performance of the MSCI U.S. Broad Market Index, which covers the whole U.S. stock market.
What You Should Know:
- Vanguard sponsors the fund.
- VTI has an expense ratio of 0.07%.
- The fund holds 3302 securities and the top ten holdings accounted for 16.5% of the overall portfolio as of Feb. 29.
- As of Feb. 29, sector allocations include consumer discretionary 11.9%, consumer staples 9.4%, energy 11.3%, financials 15.1%, health care 11.3%, industrials 11.3%, information technology 19.6%, materials 4.1%, telecommunication services 2.5% and utilities 3.5%.
- The ETF has a SEC yield of 1.91%.
- The fund is up 3.4% over the past month, up 18.2% over the past three months and up 11.8% over the past year.
- VTI is 9.1% above its 200-day exponential moving average. [An ETF Trend-Following Plan for All Seasons]
- "By investing 6%-9% in riskier, faster-growing, small-cap stocks, this fund provides diversification beyond that of most broad-market exchange-traded funds, which should help long-term returns even if it slightly raises volatility," according to Morningstar analyst Michael Rawson, CFA.
- "The index that this fund tracks had more than a 99% correlation with the large-cap S&P 500 for the past 10 years, matching it move for move," Rawson added. "Despite the high correlation, the index returned an annualized 3.9% over that time period, while the S&P 500 returned 2.9%."
The Latest News:
- Equities experienced a slight pullback Tuesday as the markets focused on the weakening growth outlook in China. [Tom Lydon Talks Market Strategy on CNBC]
- "There seems to be an underlying feeling of caution at the moment as investors struggle to find reasons to increase this current rally further," Simon Furlong, a trader at Spreadex, said in a U.S. News article. "The risk-on trading the markets have experienced recently, fueled by liquidity and a more positive outlook for the U.S. economy seems to be losing some steam."
- "I think it's just a normal pullback on weaker commodity prices due after a long runup," Peter Cardillo, chief market economist with Rockwell Global Capital, said in a Wall Street Journal report. "Housing data could cushion a U.S. decline, but stocks are likely to take a breather for a day or two."
- "I see a new bull run developing based on improving economic activity as investors continue to switch from government bonds into equities," Cardillo added.
Vanguard Total Stock Market ETF
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Max Chen contributed to this article.
Disclosure: Tom's clients own AAPL.