The diversified investment fund strategy of the Vanguard Total Stock Market Index Fund
According to the Vanguard website, the investment strategy of the Vanguard Total Stock Market Index mutual fund is to use a “passive management—or indexing—investment approach designed to track the performance of the MSCI® US Broad Market Index, which represents 99.5% or more of the total market capitalization of all of the U.S. common stocks regularly traded on the New York and American Stock Exchanges, and the Nasdaq over-the-counter market. The fund typically holds the largest 1,200–1,300 stocks in its target index (covering nearly 95% of the index’s total market capitalization) and a representative sample of the remaining stocks.”
The Fund Authority Score for the Vanguard Total Stock Market Index Fund
The table below presents the Fund Authority Score and other information for the Vanguard Total Stock Market Index mutual fund.
Fund Authority Scores rate mutual funds and exchange traded funds (ETFs) on the most important economic factors that influence individual investors’ net long term diversified investment fund performance. The Skilled Investor developed the Fund Authority Score system to provide individual investors with concise and objective summaries of mutual funds and ETFs for comparisons within investment asset classes.
Using an integer scale ranging from -10 to +10, Fund Authority Scores measure five factors:
1) annualized management and investment sales expenses (40% weighting), 2) annual trading costs implied by investment fund portfolio turnover (30% weighting), 3) inferior and superior historical performance (20% weighting), 4) minimum fund maturity (5% weighting), and 5) minimum fund size for operating efficiency (5% weighting).
For a directory of the Fund Authority Score reports of other mutual funds and ETFs, go here. For the details on how a Fund Authority Score is developed for each mutual fund or ETF, go here.
Fund Authority Summary for the Vanguard Total Stock Market Index Fund (VTSMX) Fund Authority Summary Vanguard Total Stock Market Index Fund Fund Authority Score FUND AUTHORITY SCORE (scale of -10 to +10) 9 FUND AUTHORITY SCORING COMPONENTS A) Management expenses and sales loads (-4 to +4) — Annual expense ratio with 12b-1 fees 0.19% — Front-end sales load with 5 year amortization 0.00% —- Total annual direct costs 0.19% 4 B) Fund portfolio transactions costs (-3 to +3) — Annual turnover as a trading cost proxy 3.8% 3 [...]