Vanguard, the second-largest U.S. issuer of exchange traded funds, is one of the low-cost leaders in the ETF arena and the issuer also sponsors some well-known broad market funds, including the Vanguard Total Stock Market ETF (NYSEArca: VTI).
VTI comes with a 0.05% expense ratio and covers almost every listed U.S. stock. VTI tracks the CRSP U.S. Total Market Index, which includes almost every liquid U.S. stock on the market. VTI offers a notable alternative to standard S&P 500 index funds at a time when equities are perking up.
Fueling the renewed market rally, U.S. companies are reporting increased revenue growth. For the week ended July 25, the blended revenue growth rate for the S&P 500 rose to 0.1%, above the year-over-year decline of -0.3%at the end of the previous week and the year-over-year fall of -0.8% at the end of the second quarter, writes John Butters, Senior Earnings Analyst, for FactSet.
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On a sector-by-sector basis, six sectors are reporting revenues above estimates by 1.2% or more for the second quarter, with the energy sector in the lead. Of the six, five sectors revealed an increase in revenue growth of 1 percentage point or more.
[related_stories]The energy sector has surprised markets, reporting the largest aggregate percentage to date for revenues at 2.9% and the largest percentage point improvement in revenue growth since June 30 at 4.0 percentage points.
“Smaller companies carry the potential for higher returns but also come with higher risk. Since different markets and sectors perform independently in different economic environments, it’s important for investors to have portfolio exposure to a multitude of areas outside of just the S&P 500. Vanguard has a reputation of providing some of the lowest-cost investments available, and this fund’s 0.05% expense ratio is one of the lowest in the industry. Its 2% dividend yield will also appeal to investors seeking regular income from their portfolios,” said Investopedia of VTI.
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Equity markets have been weighed down by various uncertainties, stock exchange traded funds may still strengthen as many still expect the S&P 500 to maintain its momentum, with the health care sector leading the charge.
Industry analysts in aggregate predict the S&P 500 will experience a 10% advance in price over the next year, Butters said in a note.
For more information on index funds, visit our indexing category.
Vanguard Total Stock Market ETF
