Invest In The Whole Stock Market With This Vanguard ETF

wall-street-etf“Exchange-traded funds typically have much lower expenses than ordinary mutual funds, and they give you much more trading control. But there are first-class ETFs, and there are lousy ones. Some ETFs — especially those that seek to deliver two or three times an index’s performance — are dangerous. Others invest in absurdly narrow sectors. In picking ETFs, start with Vanguard’s. For index ETFs, there’s often no reason to look anywhere else. Vanguard’s not-for-profit structure generally makes it difficult for other fund companies to compete — at least on expenses, which is the major consideration when choosing among index funds,” Steven Goldberg Reports From Kiplinger.

“Here’s how to assemble an ETF portfolio for 2010. Start by staying with broad-based funds. Invest 55% of your stock money in Vanguard Total Stock Market ETF (symbol VTI). This fund tracks the MSCI Broad Market index, which reflects the entire U.S. stock market. Over the past 12 months through January 8, it returned 31%. Like all the ETFs in this article, the weighting of its holdings is based on the market value of each stock (the share price times number of shares outstanding) in its universe. Thus, ExxonMobil, the nation’s biggest stock, represents almost 3% of the fund, while even a stock as widely held as Oracle makes up just 0.7%. Large-capitalization stocks, including mega caps, dominate this ETF, but it holds more than 3,300 companies, so 8% of its assets are in stocks of small companies. Annual expenses are a thrifty 0.09%,” Goldberg Reports.

“Speaking of mega caps, the largest companies now have a bigger advantage than usual over small companies. At a time when banks are still reluctant to lend, large companies have easier access to capital. What’s more, mega caps do a lot more business in fast-growing emerging markets than smaller companies. Make a wager on growth stocks this year. Growth stocks typically command higher price-earnings ratios than do value stocks — those that sell at low multiples to earnings, sales or other fundamental measures — but they exhibit higher growth rates. Here’s the rationale for overweighting growth: Currently, the amount by which P/Es of growth stocks exceed those of value stocks is much less than usual. Look for that gap to widen over time,” Goldberg Reports.

See The Full Story Along With The Other ETF Picks: HERE

The investment (VTI) seeks to track the performance of a benchmark index that measures the investment return of the overall stock market. The fund employs a passive management strategy designed to track the performance of the MSCI US Broad Market index, which consists of all the U.S. common stocks traded regularly on the New York Stock Exchange and the Nasdaq over-the-counter market. It typically holds 1,200-1,300 of the stocks in its target index.

TOP 10 HOLDINGS ( 15.84% OF TOTAL ASSETS)  
 
Company Symbol % Assets
Apple Inc. (AAPL) 1.42
AT&T INC. (T) 1.37
BK OF AMERICA CP (BAC) 1.25
EXXON MOBIL CP (XOM) 2.87
GEN ELECTRIC CO (GE) 1.49
INTL BUSINESS MACH (IBM) 1.36
JP MORGAN CHASE CO (JPM) 1.41
JOHNSON AND JOHNS DC (JNJ) 1.44
Microsoft Corporation (MSFT) 1.78
PROCTER GAMBLE CO (PG) 1.45

Chart for Vanguard Total Stock Market ETF (VTI)

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