Total stock market index funds offer investors a simple way to gain very broad exposure to the entire U.S. equity market with a single investment. These funds track the performance of comprehensive market indexes like the CRSP U.S. Total Market Index or the Wilshir🐈e 5000, providing diversification across thousands of stocks spanning variou🅠s sectors and company sizes.

Unlike funds that focus on specific market segments or investment styles, total market index funds capture the overall trajectory of U.S. stocks. This𓆉 approach can help cut risk through diversification while keeping costs low, as these funds typically have minimal turnover and lower expense ratios than actively managed funds.

For investors seeking a "set it and forget it" approach to equity investing, total market index funds are often the way to go. They're particularly popular in retirement accounts. That said, your retirement would then be tied to the fortunes of the American stock market.

In this article, we highlight four of the best-known total market index funds, three mutual funds and an exchange-traded fund (ETF), their recent performances, investment minimums, and 澳洲幸运5官方开奖结果体彩网:expense ratios. Before we start, here is a table that outlines what you'll want t⭕o review before investing in any total market fund:

The Vangu♚ard Total Stock Market Index Admiral Shares (VTSAX)

The Vanguard Total Stock Market Index Admiral Shares (VTSAX) is one of the most popular and widely held total market index funds. It tracks the performance of the CRSP U.S. Total Market Index, offering investors exposure to the entire U.S. equity market, including small, midsized, and large companies.

The fund's characteristics, including its expense ratio, 澳洲幸运5官方开奖结果体彩网:minimum investment, and performance metrics, are detailed in the chart below. Notably, VTSAX has a $3,000 minimum investment, which may be a consideration for som☂e investors.

VTSAX aims to provide low-cost, broad exposure to the equity markets by investing in companies that primarily trade on the New York Stock Exchange (NYSE) and Nasdaq. It's also one of the largest mutual fund holders of major tech stocks.

VTSAX's Holdings

The Vanguard Total Stock Market Index Admiral Shares is considered a large-cap blend, evidenced by some of its top 10 holdings, which make up about 30% of the fund as of the fourth quarter, 2024:

• Apple, Inc. (AAPL): 6.14%
• Microsoft Corp. (MSFT): 5.71%
• NVIDIA (NVDA): 5.14%
• Alphabet Inc. Class A and C (GOOG, GOOGL): 3.22%
• Amazon.com (AMZN): 3.08%
• Meta (META): 2.10%
• Eli Lilly and Co. (LLY): 1.51%
• Broadcom Inc. (AVGO): 1.39%

For those wanting a more accessible and easily tradable index fund, below is information on the VTI Vanguard Total Stock Market ETF, which has quite similar holdings to VTSAX. It has no minimum investment and, as an ETF, its shares can be traded throughout the day while markets are open.

Schwab Total Stock Market Index (SWTSX)

The Schwab Total Stock Market Index (SWTSX) mirrors the performance of the entire U.S. equity market, as measured by the Dow Jones U.S. Total Stock Market Index. The fund is designed to be a comprehensive blend of large, small, and midsized corporations. In terms of accessibility, the SWTSX has no investment minimum.

Equity Sector Diversification

Below are the 澳洲幸运5官方开奖结果体彩网:weightings of the major industries in the SWTSX as of the fourth quarter of 2024:

• Technology: 31.25%
• Financial services: 12.91%
• Healthcare: 11.73%
• Consumer discretionary: 10.41%
• Industrials: 8.71%

Stock Holdings

SWTSX's top 10 holdings comprise about 28% of the portfolio and include the following as of the fourth quarter, 2024:

• Apple: 6.3%
• Microsoft: 5.68%
• NVIDIA: 5.31%
• Amazon: 3.09%
• Alphabet (class A and C shares): 3.16%
• Meta (class A shares): 2.22%
• Tesla Inc. (TSLA): 1.29%

iShares Russell 3000 ETF (IWV)

BlackRock's iShares Russell 3000 (IWV) is an ETF that replicates the performance of the 澳洲幸运5官方开奖结果体彩网:Russell 3000 Index, a benchmark representing the broad U.S. equity market. Like its peers, IWV uses an indexing approach.

Equity Sector Diversification

IWV's sector allocations are like those of the Vanguard and Schwab funds. Below are its sector holdings:

Stock Holdings

Like the previous two funds, IWV also had more than 27.79% of its assets weighted in its top 10 holdings as of the fourth quarter of 2024. Some of those holdings include the following:

• Apple: 6.05%
• Microsoft: 5.55%
• NVIDIA: 5.48%
• Alphabet (class A and C shares): 3.19%
• Amazon: 3.10%
• Meta (class A shares): 2.29%
• Broadcom: 1.42%
• Eli Lilly and Co.: 1.3%

The Wilshire 5000 Index Investment Fund (WFIVX)

The FT Wilshire 5000 Index Portfolio Investment Fund (WFIVX) tracks the performance of the Wilshire 5000 Index, one of the broadest measures of the U.S. stock market. Despite its name, the Wilshire 5000 Index (and consequently this fund) doesn't actually contain 5,000 stocks. The number fluctuates based on the market but typically includes around 3,500 stocks.

The characteristics of the fund are below. WFIVX has the highest expense ratio among the funds listed.

WFIVX offers exposure to a capitalization-weighted index of all actively traded U.S.-headquartered stocks. This approach offers inves🌠tors a way to capture the performance of the entire U.S. equity market, including small, midsized, and large-cap companies.

Like the previous funds, WFIVX also had more than 27% of its assets weighted in its top 10 holdings as of the fourth quarter of 2024.

澳洲幸运5官方开奖结果体彩网: Here are its holdings by company:

The Bottom Line

Total market index funds offer investors a straightforward, cost-effective way to gain 澳洲幸运5官方开奖结果体彩网:exposure to the entire U.S.💃 stock mar꧂ket. These funds provide instant diversification across thousands of stocks, r♈educing the risk associated with individual stock picking. While they may not offer the potential for market-beating returns since they track the market, their lowও costs and broad exposure make them a solid core holding for many investors, particularly those pursuing a long-term, passive investment strategy.

When choosing a total market fund, investors should consider expense ratios, tracking error, and minimum investments. As with any investment decision, it's crucial to align your choice with your personal financial goals, risk tolerance, and overall investment strategy.

The comments, opinions, and analyses expressed on Investopedia are for informational purposes only. Read our for more info. As of the date this article was written, the author does not own any of the funds discussed.