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| - | If you invest less than $10,000 in a Standard & Poors 500 Index from Vanguard, it will cost you $20 per year as a service fee. The ETF doesn't have such a fee. | + | If you invest less than \$10,000 in a Standard & Poors 500 Index from Vanguard, it will cost you \$20 per year as a service fee. The ETF doesn't have such a fee and might be better for tax purposes. |
| - | The ETF can be traded in the market, but if you trade it using an account different from Vanguards, there might be a brokerage trading fee. | + | The ETF can be traded in the market, but if you trade it using an account different from Vanguards, there might be a brokerage trading fee and spread costs. |
| - | If you are willing to invest more than $10,000 in the S&P 500 fund, the Admiral Class is the better alternative, because you don't have to pay the $20 fee and the expense ratio is 0.04%. | + | If you are willing to invest more than \$10,000 in the S&P 500 fund, the Admiral Class is the better alternative, because you don't have to pay the \$20 fee and the expense ratio is 0.04%. |
| ==== Vanguard Total Stock Market Index Fund ==== | ==== Vanguard Total Stock Market Index Fund ==== | ||
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| The top constituents of the Total Market index are the same as the top constituents of the S&P 500: | The top constituents of the Total Market index are the same as the top constituents of the S&P 500: | ||
| - | - Apple | + | - Apple |
| - | - Microsoft | + | - Microsoft |
| - | - Amazon | + | - Amazon |
| - | - Alphabet (formerly Google) | + | - Alphabet (formerly Google) |
| - | + | ||
| - | - Berkshire Hathaway | + | - Berkshire Hathaway |
| - | - JP Morgan | + | - JP Morgan |
| - | - Exxon | + | - Exxon |
| The participation of each industry in the Total Stock Market index is: | The participation of each industry in the Total Stock Market index is: | ||
| - | - Financials: 19.9% | + | - Financials: 19.9% |
| - | - Technology: 19.87 | + | - Technology: 19.87 |
| - | - Consumer Services: 13.24% | + | - Consumer Services: 13.24% |
| - | - Industrials: 12.92% | + | - Industrials: 12.92% |
| - | - Health Care: 12.72% | + | - Health Care: 12.72% |
| - | - Consumer Goods: 8.08% | + | - Consumer Goods: 8.08% |
| - | - Oil and Gas: 6.07% | + | - Oil and Gas: 6.07% |
| - | - Utilities: 2.88% | + | - Utilities: 2.88% |
| - | - Basic Materials: 2.51% | + | - Basic Materials: 2.51% |
| - | - Telecommunications: 1.81% | + | - Telecommunications: 1.81% |
| + | |||
| + | |||
| + | {{:en:total-stock-market-vanguard-index-fund.png?nolink|}} | ||
| - | <!-- image --> | ||
| As you can see, the Total Stock Market index has a different composition than the S&P 500. Financials has more weight in the total stock market, whereas IT and Health Care has more weight in the S&P 500. | As you can see, the Total Stock Market index has a different composition than the S&P 500. Financials has more weight in the total stock market, whereas IT and Health Care has more weight in the S&P 500. | ||
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| The participation of the biggest countries is: | The participation of the biggest countries is: | ||
| - | - Australia 4.89% | + | - Japan 17.60% |
| - | - Canada 6.64% | + | - UK 12.57% |
| - | - China 7.10% | + | - China 7.10% |
| - | - France 6.54% | + | - Canada 6.64% |
| - | - Germany 6.19% | + | - France 6.54% |
| - | - Japan 17.60% | + | - Germany 6.19% |
| - | - Korea 3.56% | + | - Switzerland 5.00% |
| - | - Taiwan 3.18% | + | - Australia 4.89% |
| - | - UK 12.57% | + | - Korea 3.56% |
| - | - Switzerland 5% | + | - Taiwan 3.18% |
| - | <!-- image --> | + | {{:en:vanguard-ftse-index-fund.png?nolink|}} |
| Top constituents are: | Top constituents are: | ||
| - | - Tencent Holdings (China) 1.18% | + | - Tencent Holdings (China) |
| - | - Nestle (Switzerland) 0.98% | + | - Nestle (Switzerland) |
| - | - Alibaba (China) 0.83% | + | - Alibaba (China) |
| - | - Samsung (Korea) 0.81% | + | - Samsung (Korea) |
| - | - HSBC (UK) | + | - HSBC (UK) |
| - | - Taiwan Semiconductors (Taiwan) | + | - Taiwan Semiconductors (Taiwan) |
| - | - Toyota (Japan) | + | - Toyota (Japan) |
| - | - Novartis (Switzerland) | + | - Novartis (Switzerland) |
| - | - Shell (UK) | + | - Shell (UK) |
| - | - Roche (Switzerland) | + | - Roche (Switzerland) |
| - | As you can see, this index fund covers a lot of big stocks in many countries. It can be considered more diversified than the Vanguard S&P500 index fund and the Vanguard Total Stock Market Fund. | + | As you can see, this index fund covers a lot of big stocks in many countries. It can be considered more diversified than the Vanguard S&P500 index fund and the Vanguard Total Stock Market Fund. The average market capitalization is $23 billion. |
| This Vanguard fund has an low 0.18 percent expense ratio, and requires a minimum investment of $3,000 for the Investors Shares version (0.17% expense ratio), and $10,000 for the Admiral class (0.11% expense ratio). It also has an ETF version, that also has 0.11% expense ratio, but may incur in brokerage commissions. | This Vanguard fund has an low 0.18 percent expense ratio, and requires a minimum investment of $3,000 for the Investors Shares version (0.17% expense ratio), and $10,000 for the Admiral class (0.11% expense ratio). It also has an ETF version, that also has 0.11% expense ratio, but may incur in brokerage commissions. | ||
| The non ETF versions are less tax efficient and have more restrictions on buying and selling, but they do not incur in commissions or spreads. | The non ETF versions are less tax efficient and have more restrictions on buying and selling, but they do not incur in commissions or spreads. | ||
| - | |||
| - | Minimizing | ||
| This index fund, allows investors to expose it's portfolio to overseas companies. The fund is very diversified by companies, sector and countries. Because it's a market cap weighted fund, it's focused on the largest companies in the world. | This index fund, allows investors to expose it's portfolio to overseas companies. The fund is very diversified by companies, sector and countries. Because it's a market cap weighted fund, it's focused on the largest companies in the world. | ||
| Alternatives to this fund are: | Alternatives to this fund are: | ||
| + | |||
| - iShares Core MSCI Total International Stock ETF (IXUS). | - iShares Core MSCI Total International Stock ETF (IXUS). | ||
| - iShares MSCI ACWI ex-U.S. ETF (ACWX). | - iShares MSCI ACWI ex-U.S. ETF (ACWX). | ||
| - SPDR MSCI ACWI ex-U.S. ETF (CWI). | - SPDR MSCI ACWI ex-U.S. ETF (CWI). | ||
| - | The average market capitalization is $23 billion. | + | |