What Is the Vanguard Total Stock Market ETF (VTI)?
The Vanguard Total Stock Market ETF (VTI) tracks the performance of the CRSP U.S. Total Market Index. The fund has returned 510% since its inception in 2001 (as of Feb. 11, 2024). The fund is a market capitalization-weighted index that measures the entire investable U.S. equity market. It includes small-, mid-, and large-cap companies. The fund is managed in a passive manner and uses an index-sampling strategy.
Key Takeaways
- The Vanguard Total Stock Market ETF is a well-diversified exchange-traded fund (ETF) that holds over 3,700 stocks.
- The ETF’s top sector is technology, with a 27.7% weighting, while Microsoft, Apple, and Alphabet are its top three holdings, making up 13.2% of the ETF.
- It has a low expense ratio (0.03%) and tracks the broader stock market very closely (beta of 1), making it a low-cost way to get exposure to the U.S. equity market.
Understanding Vanguard Total Stock Market ETF (VTI)
The Vanguard Total Stock Market ETF is an open-ended fund issued by Vanguard and advised by the Vanguard Equity Investment Group. The fund is a passive index fund and therefore has a remarkably low expense ratio of 0.03%. The fund has a relatively low turnover rate of 8%, meaning that there are limited transaction costs for changing the fund's holdings. The expense ratio does not include any commissions or brokerage fees. The low expense ratio is beneficial for long-term investors in the fund.
Shares are trading around $248 as of February 2024. The fund has an average daily volume of 2.4 million shares, indicating that there is a great deal of liquidity in the ETF. VTI shares trade on the New York Stock Exchange. Investors can buy shares with no commission through Vanguard Brokerage Services.
Holdings of Vanguard Total Stock Market ETF (VTI)
The fund has over 3,750 stocks in its portfolio, a massive amount for an ETF. The median market cap of the fund's holdings is $149.3 billion. The weighted average price-to-earnings (P/E) ratio for the portfolio is 22.9, with a price-to-book (P/B) ratio of 3.9. The P/E ratio takes the current market value of companies' shares divided by the earnings per share (EPS). The P/B ratio takes the share price divided by the total liabilities minus intangible assets and liabilities.
The technology sector has the highest weighting in the fund at 31%, followed by the consumer discretionary sector with a weighting of 14.5%. The industrial care sector is in third with a weighting of 13.1%.
Apple (AAPL) is the largest holding with a 6.1% weighting, followed by Microsoft (MSFT) with a 6.0% weighting. Amazon (AMZN) is the third-largest holding with a weighting of 3.0%, while Nvidia (NVDA) is fourth with a 3.2% weighting. The top 10 holdings had a combined 26.4% of the fund's holdings (As of Feb. 11, 2024).
$1.5 trillion
The total assets in the Vanguard Total Stock Market ETF (VTI), as of Feb. 11, 2024.
Benefits of Vanguard Total Stock Market ETF (VTI)
VTI is an extremely diversified fund. Its large amount of holdings reflect the entire universe of investable U.S. securities. The fund has exposure to small-cap stocks which can be more volatile than mid- or large-cap holdings. The fund has a beta of 1.0 when compared to the larger market. The fund has exposure to systematic risk, which is the risk inherent in the entire market. A larger downturn in the U.S. economy or the world economy is likely to impact the value of the fund.
The fund has performed well recently following the larger bull run for equities. As of February 2024, VTI has a one-year return of 19.2% with a five-year return of 13.4%. This ETF reflects the larger universe of U.S. equities in a low-cost single fund. Investors need to include other assets that are not as correlated to the stock market so they can balance their portfolios. Pursuant to the tenets of modern portfolio theory, holding non-correlated assets can help to minimize portfolio risk.
What Is the Average Annual Return of VTI?
The Vanguard Total Stock Market ETF (VTI) has had an average annual return of 8.3% since its inception in 2001.
How Much Do I Need to Invest in VTI?
Generally, the minimum investment for an exchange-traded fund is one share, which for VTI costs $248 as of February 2024. However, some brokers may allow investors to purchase fractions of a share.
Does VTI Pay a Dividend?
Yes, VTI pays a dividend every three months, with an annual dividend yield of 1.38%. The last dividend payment was paid out on Dec. 21, 2023, with a dividend of $1 per share.
The Bottom Line
The Vanguard Total Stock Market ETF is a popular way to save for retirement or long-term growth. The fund represents a snapshot of the stock market, allowing investors to track the gains of the market as a whole rather than invest in individual shares. Like many other index ETFs, it has an extremely low expense ratio, because its management costs are lower than actively managed funds.
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FAQs
Vanguard Total Stock Market ETF VTI offers cost-efficient, well-diversified exposure to the entire US stock market—a recipe for success over the long run. The fund tracks the CRSP US Total Market Index, which represents approximately 100% of the investable US opportunity set.
Is Vanguard Total Stock Market ETF a millionaire maker? ›
Be prepared for volatility
But betting the house on this one ETF, while it could make you a millionaire, would probably leave you with sleepless nights and deep drawdowns. Most investors will likely want to use it to spice up a portfolio, not as their entire portfolio.
Why is VTI so popular? ›
The Vanguard Total Stock Market Fund (VTI -0.73%) is, like VOO, an index ETF that's popular because of the diversification it provides at an unbeatable price.
Does VTI outperform SPY? ›
VTI has an advantage with an expense ratio of 0.03% compared to 0.09% of SPY. Another key difference is the performance in annual returns and dividend yield. SPY has a clear advantage in annual returns; it has outperformed VTI by an average of 1% in 8 of the last ten years.
Is it better to buy VTI or VOO? ›
Both ETFs are excellent, low-fee options for your portfolio. They are Vanguard's largest ETFs by net assets. VTI is a total U.S. market fund and holds more than 3,500 stocks. VTI is better diversified and benefits from small and mid-cap stocks that grow into large caps.
What will VTI be worth in 5 years? ›
Vanguard Total Fund VTI stock price stood at $259.76
According to the latest long-term forecast, Vanguard Total Fund VTI price will hit $300 by the end of 2025 and then $350 by the middle of 2027. Vanguard Total Fund VTI will rise to $450 within the year of 2028, $500 in 2030 and $600 in 2034.
What is the highest growing Vanguard ETF? ›
ETFs: ETF Database Realtime Ratings
| Symbol Symbol | ETF Name ETF Name | YTD YTD |
|---|
| MGK | Vanguard Mega Cap Growth ETF | 12.70% |
| VONG | Vanguard Russell 1000 Growth ETF | 12.74% |
| VBK | Vanguard Small Cap Growth ETF | 3.31% |
| VOT | Vanguard Mid-Cap Growth ETF | 4.33% |
5 more rowsAt a glance: ETFs vs. mutual funds
| Features | ETFs | Mutual funds Learn more about mutual funds |
|---|
| Investment minimums | $1 for Vanguard ETFs®; at share price for all other ETFs | Can range from $1,000 to $50,000 depending on the fund |
| Tax efficiency Some investment products generate less taxable income. | Generally more | Generally less |
8 more rowsMost Vanguard mutual funds have a $3,000 minimum, but you can invest in any Vanguard Target Retirement Fund or Vanguard STAR® Fund with as little as $1,000. (Some funds have minimums greater than $3,000 to protect the funds from short-term trading activity.)
How long should you hold VTI? ›
In general, such funds are appropriate for investors who have a long-term investment horizon (ten years or longer), who are seeking growth in capital as a primary objective, and who are prepared to endure the sharp and sometimes prolonged declines in share prices that occur from time to time in the stock market.
VTI is an extremely diversified fund. Its large amount of holdings reflect the entire universe of investable U.S. securities. The fund has exposure to small-cap stocks which can be more volatile than mid- or large-cap holdings. The fund has a beta of 1.0 when compared to the larger market.
Why choose VTI over VTSAX? ›
The only difference is that VTI's expense ratio is slightly lower at 0.03% compared with 0.04% for VTSAX. This is in alignment with other Vanguard comparisons, such as VOO versus VFIAX. The lower expense ratio gives VTI a slight edge in performance, especially for periods of less than 10 years.
Is VTI or S&P 500 better? ›
You can't go wrong with either the Vanguard Total Stock Market ETF or the Vanguard S&P 500 ETF. Both offer very low expense ratios and turnover rates, and the difference in their tracking errors is negligible. The overlap in their holdings ensures that you'll get very similar returns going forward.
Does VTI pay dividends? ›
VTI has a dividend yield of 1.36% and paid $3.54 per share in the past year. The dividend is paid every three months and the last ex-dividend date was Mar 22, 2024.
What is the VTI 10 year return? ›
Total returns
| Month-end | 10-yr |
|---|
| VTI (Market price) | -4.40% | 11.77% |
| VTI (NAV) | -4.42% | 11.77% |
| Benchmark 1 | -4.41% | 11.77% |
The Vanguard Total Stock Market Index Fund ETF Shares is a well-managed and cheap exchange-traded fund that offers investors exposure to the entire U.S. stock market. The VTI ETF has been making new highs and is expected to continue rising in the long term, although a slight consolidation may be due in the near future.
Should I invest in VTI or Vtsax? ›
VTI vs VTSAX: Who Should Invest
Investors who prefer to trade during the day to take advantage of price fluctuations may prefer an ETF like VTI, whereas a more passive buy-and-hold investor may prefer a mutual fund like VTSAX.
What is the average rate of return on VTI? ›
Vanguard Total Stock Market (VTI): Historical Returns
Video Player is loading. In the last 30 Years, the Vanguard Total Stock Market (VTI) ETF obtained a 10.29% compound annual return, with a 15.55% standard deviation.
