Investment researcher Morningstar says Vanguard Total Stock Market (NYSEArca: VTI) is its favorite ETF for index-based exposure to U.S. stocks “as it provides the broadest possible exposure for the incredibly low cost of 0.05%.”
VTI is one of the 10 largest ETFs listed in the U.S. with total assets of more than $34.3 billion.
S&P 500 ETFs attract more trading volume but the index is dominated by large-cap stocks and does not include most mid-caps or any small-cap and micro-cap stocks, says Morningstar fund analyst Michael Rawson.
“In contrast, VTI invests in most liquid U.S. stocks, sweeping in more than 3,500 holdings across the market-cap spectrum. Over the long run, small-cap stocks tend to outperform their larger counterparts,” he wrote in a commentary this week.