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Vanguard Total Stock Market Index Fund Surpasses $1T Level Becoming First of Its Kind

UTC by Steve Muchoki · 3 min read
Vanguard Total Stock Market Index Fund Surpasses $1T Level Becoming First of Its Kind
Photo: Depositphotos

Vanguard equity fund includes as many as 3590 different stocks, thus offering individual investors a chance to diversify, reduce risk, and optimize their investments.

Amid soaring US stocks, the Vanguard Total Stock Market Index Fund has made history by topping $1 trillion in its asset under management according to media outlet Bloomberg. Reportedly, the Vanguard Equity fund that encompasses both mutual funds and an exchange-traded fund had a total of $1.04 trillion of assets as of November 30.

“Given that Vanguard birthed index investing, it seems only fitting that one of their flagship funds would be the first to reach this historic mark,” said Nate Geraci, president of the ETF Store, an investment advisory firm.

Apparently, the Vanguard equity fund includes as many as 3590 different stocks, thus offering individual investors a chance to diversify, reduce risk, and optimize their investment. With its known past record performance, most investors are interested in putting their capital with the fund especially fueled by the coronavirus market nature.

Notably, the Vanguard equity fund had 23.4% of its portfolio in technology stocks and approximately 1.9% in energy stocks. The technology stocks led by Apple Inc (NASDAQ: AAPL), Tesla Inc (NASDAQ: TSLA), Berkshire Hathaway Inc (NYSE: BRK) have mostly influenced the recent rally in the Vanguard equity fund. In addition to soaring US stocks, the Vanguard equity fund has been significantly bolstered by the falling fees.

“Investors have become much more educated on the importance of fund fees and the serial underperformance of active management,” Geraci noted.

Vanguard Fund and Market Perspective

Notably, the Vanguard Total Stock Market Index Fund was launched back in 1992 and has grown to become one of the most successful equity funds around the world. Bloomberg previously reported that Vanguard is the largest issuer of mutual funds and has grown to become the top issuer of ETF this year. Ostensibly, the firm controls approximately 28% of the total $5.3 trillion United States ETF industry.

The historic entry to $1 trillion of Vanguard equity fund has coincided with the talks of the second stimulus package and the final talks of Brexit.

The United States has been largely affected by the ongoing coronavirus pandemic with most of its business resulting in laying off its employees. However, the expected second stimulus package is expected to cushion the economy until a possible vaccine is approved for mass use.

On the other hand, as the Brexit transition expires in two weeks, the head of the European Commission said Wednesday there’s a “narrow” path to a trade deal between the European Union and Britain. Global investors perhaps are left seeking refuge to reputable mutual funds like Vanguard to shield themselves from increased risks and also negative volatility.

Business News, Funds & ETFs, Indices, Market News, News
Steve Muchoki

A financial analyst who sees positive income in both directions of the market (bulls & bears). Bitcoin is my crypto safe haven, free from government conspiracies. Mythology is my mystery! "You cannot enslave a mind that knows itself. That values itself. That understands itself."

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