Diversification

The VTI ETF provides investors with exposure to a diversified portfolio of US stocks that represent nearly 100% of the US stock market.

This diversification helps to spread out investment risk, as it reduces the impact of any one stock's performance on the overall portfolio.

By investing in a diversified portfolio of stocks, investors can potentially reduce the overall risk of their investment portfolio.

Large-, mid-, and small-cap equity diversified across growth and value styles

The VTI ETF tracks 4,000 listed US companies across mega, large, small and micro capitalisation, and represents close to 100% of the US equity market.

What difference will this 20% of small and mid-capitalisation companies make to our investments? Probably not much?

As the S&P 500 index does not include the smaller capitalisation companies, investing in an ETF tracking this index means that you might miss out on some good growth companies which are still considered to have a “small” market capitalisation.

For instance, if you had invested in the VTI ETF back in 2020, you would have directly owned Tesla and captured its staggering 740% returns as part of the ETF returns.

This was not the case for the VOO ETF, as Tesla was only added to the S&P 500 benchmark in December 2020.

Low cost

The VTI ETF has a low expense ratio compared to actively managed funds.

The expense ratio of the VTI ETF is currently 0.03%, which means that investors pay only $3 in fees for every $10,000 invested.

This low cost makes the VTI ETF an attractive option for cost-conscious investors who want to keep their investment expenses low.

Vanguard Total Stock Market ETF (VTI) Analysis

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