The Vanguard ETF That Could Set You Up for Life if You Buy It Now

1 hour ago 2

David Dierking, The Motley Fool

Thu, May 28, 2026 astatine 12:35 PM CDT 4 min read

U.S. stocks could beryllium connected gait for their 4th consecutive twelvemonth of double-digit gains if the existent gait holds. The Vanguard S&P 500 ETF (NYSEMKT: VOO) has returned 26%, 25%, and 18%, respectively, implicit the past 3 calendar years, and it's up different 10% twelvemonth to day successful 2026.

If you travel the aged saying of "if it ain't broke, don't hole it," it would beryllium understandable to support holding this ETF for the foreseeable future. For semipermanent buy-and-hold investors, it's a strategy that makes a batch of consciousness and is surely defensible fixed its ultra-low disbursal ratio and agelong way grounds of success.

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I privation to marque the case, however, for the Vanguard Total Stock Market ETF (NYSEMKT: VTI). It has a somewhat antithetic creation than the S&P 500 (SNPINDEX: ^GSPC), 1 that could marque it an outperformer successful the years ahead. If you proceed to steadily put successful it AND tin negociate the temptation to clip the marketplace during periods of volatility, it could acceptable you up for a beingness of fiscal independence.

Happy capitalist looking astatine fiscal charts connected a machine screen.

Why the Vanguard Total Stock Market ETF (VTI) is the perfect portfolio cornerstone

This ETF tracks the CRSP US Total Market Index, which is fundamentally a market-cap-weighted scale of the full investable U.S. banal market. With the S&P 500, you get a handbasket of astir 500 large-cap stocks. With the Vanguard Total Stock Market ETF, you get astir 3,500 stocks of each sizes.

Because some are market-cap-weighted, there's important overlap. Even with those further 3,000 stocks, there's an 88% overlap of assets. That means the correlation of show and volatility is precise high.

But that 12% weighting that the Vanguard Total Stock Market ETF has to mid-cap and small-cap stocks matters. That group's creation doesn't look similar the S&P 500. The smaller-stock-focused Russell 2000 index, for example, has 16% to 19% weightings successful each of the industrials, tech, financials, and healthcare sectors. That means adding this radical to a large-cap portfolio provides existent diversification benefits and added maturation potential.

VTI: Performance and cardinal metrics

Metric

Value

Assets nether management	$646 billion
Expense ratio	0.03%
Dividend yield	1.1%
1-year full return	29.4%
5-year full instrumentality (annualized)	12.9%
Holdings	3,494
Top sectors	Tech (39%), user discretionary (13%), industrials (12%)
Top holdings	Nvidia (6.6%), Alphabet (5.8%), Apple (5.7%), Microsoft (4.4%)