ETF Spotlight: Vanguard Total Stock Market

March 21st at 1:30pm by Tom Lydon

ETF Spotlight on Vanguard Total Stock Market ETF (NYSEArca: 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.

Holdings: Top holdings as of Feb. 29 include: Apple (NasadaqGS: AAPL), Exxon Mobil (NYSE: XOM), Microsoft (NasadaqGS: MSFT), International Business Machines (NYSE: IBM) and Chevron (NYSE: CVX).

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

For past stories in this series, visit our ETF Spotlight category.

Max Chen contributed to this article.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.

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