Investors and portfolio managers are often faced with a decision in equities in terms of choosing “large caps versus mid caps versus small caps,” or even a combination. Thus, “All Cap” funds may have appeal to those that are simply looking for broad U.S. equity exposure regardless of specific company size.
The largest fund in the category is VTI (Vanguard Total Stock Market), which has accumulated about $23 billion in assets under management. We do point out however that VTI is tied to the MSCI Broad Market Index, and as reiterated by the press several times over the past few weeks, Vanguard will be terminating their relationship with MSCI in the near future.
This will ultimately lead to funds such VTI perhaps waning in terms of performance due to potential tracking error that may arise given its new index make up in the near term. Nevertheless, there are other options in the “All Cap” equity space.
Other prominent funds include IWV (iShares Russell 3000), SCHB (Schwab U.S. Broad Market), PDP (PowerShares DWA Technical Leaders Portfolio), and IYY (iShares DJ U.S. Index). [Total Market ETFs]
Year to date, all of these funds are up nicely, between 12-14.98% on the high end (PDP). Portfolio diversification is certainly available due to the nature of these “All Cap” equity ETFs holding broad baskets of equities, ranging across market caps (small, mid, large), and their presence and availability also present a “core portfolio building block” for those managers that are simply not comfortable choosing one “cap” size over the others (i.e. overweighting mid caps to small caps for instance).
iShares Russell 3000
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