In investing, total stock market index funds emerge as a prominent investment vehicle, providing investors with exposure to a wide array of stocks aggregated within an exchange-traded fund (ETF) or a mutual fund. By mimicking an equity index - a composite of multiple stocks spanning a number of industries - these funds are engineered to signify the dynamics of the overall total stock market index fund institutional plus shares equity market.
The core of a total market index fund's performance lies in its investment in stocks that align with a specific index, referred to as a benchmark. This spectrum of stocks can span from large, well-recognized corporations to smaller, lesser-known companies.
Predominantly, total market index funds assign weights to stocks based on market capitalization, meaning that these funds continue to maintain substantial exposure to the largest companies in the U.S., such as Amazon and Microsoft. Investing in total market index funds comes with the advantage of minimal fees, permitting a more substantial share of the return to be passed onto the investors total stock market index fund institutional plus shares.
Best Total Stock Market ETFs
Vanguard Total Stock Market ETF (VTI)
Attribute | Details |
Objective | To track the performance of the CRSP U.S. Total Market Index, incorporating large-, mid-, and small-cap companies across value and growth styles |
Year-to-date performance | 17.2% |
Historical performance (5-year annual) | 10.8% |
Expense ratio | 0.03% |
Schwab U.S. Broad Market ETF (SCHB)
Attribute | Details |
Objective | To emulate the total return of the Dow Jones U.S. Broad Stock Market Index, covering companies across the market-cap spectrum |
Year-to-date performance | 17.3% |
Historical performance (5-year annual) | 10.9% |
Expense ratio | 0.03% |
iShares Core S&P Total U.S. Stock Market ETF (ITOT)
Attribute | Details |
Objective | To reflect the performance of the S&P Total Market Index, holding over 3,300 securities |
Year-to-date performance | 17.2% |
Historical performance (5-year annual) | 10.8% |
Expense ratio | 0.03% |
S&P 1500 ETF (SPTM)
Attribute | Details |
Objective | To match, as closely as possible, the total return of S&P 1500 Index, representing approximately 90% of the investable equity market in the U.S. |
Year-to-date performance | 16.9% |
Historical performance (5-year annual) | 11.3% |
Expense | 0.03% |
Top-performing Total Stock Market Mutual Funds
Fidelity Total Market Index Fund (FSKAX)
Attribute | Details |
Objective | To generate a return parallel to the total return on a broad range of U.S. stocks, typically investing about 80% of its assets in stocks included in the Dow Jones U.S. Total Stock Market Index |
Year-to-date performance | 17.3% |
Historical performance (5-year annual) | 10.8% |
Expense ratio | 0.015% |
Wilshire 5000 Index Investment Fund (WFIVX)
Attribute | Details |
Objective | To replicate the total return of the Wilshire 5000 Total Market Index, including 3,500 stocks and is market-cap weighted |
Year-to-date performance | 16.5% |
Historical performance (5-year annual) | 10.5% |
Expense ratio | 0.58% |
Total Market Index Funds - Advantages and Disadvantages
Advantages
- A total market index fund offers a highly diversified total stock market index fund portfolio across market caps and investment styles through a single security.
- As these funds are engineered to match the performance of the entire stock market, investors don't have to spend time researching potential outperforming sectors or companies. Investing in a total market fund enables investors to realize long-term stock market returns for a particular region as long as they stay invested in the total stock market index fund.
Drawbacks
- Your returns are confined to the overall performance of the stock market, and switching between total market funds is unlikely to significantly affect this.
- The broad reach of these funds may cause you to miss out on the opportunity to leverage outsized gains when a specific market segment outperforms.
- Investing in total market index funds can seem unexciting, despite being a highly practical approaching the markets stock index fund.
Frequently Asked Questions
Who is the ideal investor for total market index funds?
Investors of all experience levels can benefit from total market index funds. These funds provide an easy and low-cost way to gain broad stock market exposure. These are ideal because they’re easy to use and manage, and investors can have higher yielding’s of markets stock index fund in the future.
What makes the Vanguard total stock market index fund admiral shares so sought after?
Vanguard total stock market index fund admiral shares enjoy immense popularity due to their capacity to provide investors with comprehensive exposure to the entire U.S. stock market at a reasonable cost. To invest in the fund's admiral shares, investors need to maintain an investment of at least $3,000, where they're charged an annual fee of 0.04 percent, translating to a mere $4 in expenses for every $10,000 invested in the fund.
How can one invest in a total market index fund?
To invest in a total market index fund, one needs to start by opening a brokerage account that provides ETFs and index funds. Some notable funds to consider include VTSAX, SWTSX, and WFIVX.
