19 Important Things You Should Know About Vanguard VTSAX Before You Buy It

Milan Kovacevic July 28, 2019

In this Vanguard VTSAX review, we’ll address key questions our readers have been asking us about this Fund, beyond what you can normally find in VTSAX Morningstar reviews.

Vanguard Total Stock Market Index Fund Admiral Shares (VTSAX) is a top 3 mutual fund by assets and is hugely popular among retail (individual) investors.  We’ll cover some of the basic and advanced things you should know about VTSAX, such as:

  1. VTSAX mutual fund profile (i.e., what does it track?)
  2. VTSAX underlying index
  3. VTSAX number of holdings
  4. VTSAX top holdings
  5. VTSAX minimum initial investment amount
  6. VTSAX historical performance
  7. VTSAX dividend yield
  8. VTSAX expense ratio
  9. VTSAX sales load and distribution expenses
  10. Implications for VTSAX taxable accounts
  11. VTSAX beta                                                                                               
  12. VTSAX vs VTI
  13. VTSAX vs VFIAX
  14. VTSAX vs VFINX
  15. VTSAX vs VTSMX
  16. VTSAX vs VOO
  17. VTSAX vs SPY
  18. VTSAX vs FSTVX
  19. … and other index funds.

So let’s start.  Scroll down to questions that are most interesting to you. 


1.  What is VTSAX?  What does it track?

VTSAX is a Vanguard large-blend mutual fund focused on the US market.  The Fund seeks to track the performance of a benchmark index that measures the investment return of the overall stock market in the United States.  The Fund employs a "passive” management approach.

2.  What is the underlying index for VTSAX?

It is CRSP US Total Market Index.  It represents nearly 100% of the US investable equity market.

3.  How many stocks does VTSAX have as its holdings?

VTSAX has ~3,600 stocks as its holdings.

4.  What are the top holdings of VTSAX?

The top 10 holdings represent 15.31% of total VTSAX assets.

Here are the top holdings:



Name

Symbol

% Assets

Apple Inc

AAPL

2.72%

Microsoft Corp

MSFT

2.17%

Facebook Inc A

FB

1.54%

Amazon.com Inc

AMZN

1.49%

Johnson &   Johnson

JNJ

1.32%

Exxon Mobil Corp

XOM

1.32%

Berkshire   Hathaway Inc B

BRK.B

1.31%

JPMorgan Chase   & Co

JPM

1.27%

Alphabet Inc A

GOOGL

1.09%

Alphabet Inc C

GOOG

1.08%

 

5.  What is the minimum initial investment amount for VTSAX?

$10,000.

6.  How did VTSAX perform historically?

VTSAX has generated the following returns:

  • 1-month return is 2.46%;
  • 3-month return is 4.54%;
  • 1-year return is 18.63%;
  • 3-year annualized return is 10.69%;
  • 5-year annualized return is 14.18%.

You can view VTSAX performance relative to an S&P 500 index fund below. 

In the last 16 years, VTSAX had 13 up years and 3 down years.  In the last 5 years (2012-2016), the Fund has generated positive returns. 

7.  What is VTSAX dividend yield?

VTSAX yield is 1.85%.

8.  What is VTSAX expense ratio?

VTSAX expense ratio is 0.04%.  This is one of the lowest expense ratios among mutual funds.

9.  Does VTSAX have any sales loads or distribution expenses? 

No, VTSAX has no 12-b1 marketing / distribution expenses or front-end / back-end sales loads.

10.  What is VTSAX tax efficiency (tax-cost ratio)?

VTSAX tax-cost ratio is 0.78%.  The tax-cost ratio measures how much a fund’s annualized return is diminished by the taxes investors pay on distributions.  Funds like VTSAX regularly distribute dividends and capital gains.

11.  What is VTSAX beta?  How would you assess VTSAX risk? 

VTSAX 3-year beta is 1.01.  That means the Fund is very closely correlated to S&P 500 (the risk level is commensurate with S&P 500).

12.  Compare and contract: VTSAX vs VTI (i.e., VTI vs VTSAX).

Below is a comparison table for VTSAX and VTI.



VTI

VTSAX

Security Type

ETF

Mutual fund

Segment

Equity: U.S. - Total Market

U.S. Equity: Large Blend

Net Assets

$81.33B

$170.10B

Expense Ratio

0.04%

0.04%

Management Style

N/A

passive (index-based)

Minimum Investment

N/A

$10,000

YTD Return

13.83%

13.95%

1-Year Return

18.64%

18.63%

3-Year Return

10.70%

10.69%

5-Year Return

14.18%

14.18%

1-Year Tax Cost

0.47%

0.78%

 

As you can see, VTSAX is a mutual fund, while VTI is an ETF.  Both are based on the CRSP US Total Market Index and cover almost the entire US stock market.

VTSAX minimum initial investment is $10,000.  VTI has no minimum.  Their performance is roughly the same, while their expense ratios are exactly the same (0.04%). VTI is more tax efficient.  Its tax cost ratio is roughly 0.31 percentage points lower than that for VTSAX.

Now, let’s talk about the advantages/disadvantages of mutual funds and ETFs.  ETFs trade like stocks, while mutual funds’ price is determined at the end of a business day when Net Asset Value (NAV) is set. 

VTI is an ETF, so you may have to pay a trading fee unless you invest through a zero-commission brokerage or Vanguard.

With mutual funds, it may be easier to enroll in automatic investments, so you can acquire shares in desirable proportions.  As a matter of fact, you can even choose an option to automatically deduct from your bank account every month.

If you have a Vanguard account, you will have access to no-fee, no-commission reinvesting for both ETFs and mutual funds. That means you won’t be paying a trading commission for either VTSAX or VTI.  And you’ll be able to reinvest dividend and/or capital gains distributions.

Our recommendation—invest in VTI (vs. VTSAX) using a low-cost/no-cost brokerage (such as Robinhood or Vanguard for Vanguard funds).  VTI is more tax-efficient and doesn’t require a minimum investment.

If you’d like to watch a quick, insightful video on ETFs vs. mutual funds, we recommend the following piece from WSJ: 


13.  Compare and contract: VTSAX vs VFIAX (i.e., VFIAX vs VTSAX).

Below is a comparison table for VTSAX and VFIAX.

 


VFIAX

VTSAX

Segment

U.S. Equity: Large Blend

U.S. Equity: Large Blend

Net Assets

$205.30B

$170.10B

Expense Ratio

0.04%

0.04%

Minimum Investment

$10,000

$10,000

YTD Return

14.20%

13.95%

1-Year Return

18.57%

18.63%

3-Year Return

10.78%

10.69%

5-Year Return

14.18%

14.18%

1-Year Tax Cost

0.77%

0.78%


VFIAX is an Admiral class Vanguard mutual fund that tracks S&P 500.VTSAX tracks CRSP US Total Market Index and cover almost the entire US stock market.

VFIAX has approximately 500 stocks as its holdings, while VTSAX has ~3600. The two funds have similar return profiles, cost ratios and tax efficiencies. They are both Admiral funds, which means a minimum $10K is required for investment.

Our recommendation—the decision between VFIAX and VTSAX should be up to you.If you’re striving for the entire US stock market coverage, choose VTSAX.If your goal is to invest in the top 500 US stocks, go with VFIAX.Both funds are a great choice. 

For an active discussion around the two funds, you can join Morningstar’s board here.

14.  Compare and contract: VTSAX vs VFINX (i.e., VFINX vs VTSAX).

Below is a comparison table for VTSAX and VFINX.

 


VFINX

VTSAX

Segment

U.S. Equity:   Large Blend

U.S. Equity:   Large Blend

Net Assets

$28.20B

$170.10B

Expense Ratio

0.14%

0.04%

Minimum   Investment

$3,000

$10,000

YTD Return

14.12%

13.95%

1-Year Return

18.46%

18.63%

3-Year Return

10.66%

10.69%

5-Year Return

14.06%

14.18%

1-Year Tax   Cost

0.73%

0.78%


VFINX is an Investor Class Vanguard mutual fund that tracks S&P 500.  VTSAX tracks CRSP US Total Market Index and covers almost the entire US stock market.

VFINX has approximately 500 stocks as its holdings, while VTSAX has ~3,600.

VFINX is 0.1 percentage points more expensive than VTSAX, but it requires a lower minimum initial investment ($3K vs. $10K).

Our recommendation—be clear on what segment of the market you’d like to invest in (the whole US market vs. S&P 500 stocks) before you choose between VFINX and VTSAX.

15.  Compare and contract: VTSAX vs VTSMX (i.e., VTSAX vs VTSMX).

Below is a comparison table for VTSAX (Admiral Class Shares) and VTSMX (Investor Class Shares).

 


VTSAX

VTSMX

Segment

U.S. Equity: Large Blend

U.S. Equity: Large Blend

Net Assets

$170.10B

$116.10B

Expense Ratio

0.04%

0.15%

Minimum Investment

$10,000

$3,000

YTD Return

13.95%

13.86%

1-Year Return

18.63%

18.51%

3-Year Return

10.69%

10.58%

5-Year Return

14.18%

14.05%

1-Year Tax Cost

0.78%

0.74%


VTSMX also seeks to track the performance of a benchmark index that measures the investment return of the overall stock market: CRSP US Total Market Index.

The key difference between VTSAX and VTSMX is that the latter requires a higher minimum initial investment ($10K vs. $3K) and has a lower expense ratio. The differences in capital gains and historical returns also exist because of the different expense ratios.

Our recommendation—choosing between VTSAX and VTSMX is straightforward. If you have $10K to invest, go with VTSAX.

16.  Compare and contract: VTSAX vs VOO (i.e., VOO vs VTSAX).

Below is a comparison table for VTSAX and VOO.

 


VOO

VTSAX

Security Type

ETF

Mutual fund

Segment

Equity: U.S.   - Large Cap

U.S. Equity:   Large Blend

Net Assets

$71.19B

$170.10B

Expense Ratio

0.04%

0.04%

Management   Style

N/A

passive   (index-based)

Minimum   Investment

N/A

$10,000

YTD Return

14.01%

13.95%

1-Year Return

18.54%

18.63%

3-Year Return

10.77%

10.69%

5-Year Return

14.17%

14.18%

1-Year Tax   Cost

0.49%

0.78%

 
As you can see, VTSAX is a mutual fund, while VOO is an ETF.  VTSAX is a CRSP US Total Market index fund (covering almost the entire US stock market), while
VOO is an S&P 500 ETF.

VTSAX minimum initial investment is $10,000.  VOO has no minimum requirement. 

Their performance is roughly the same, while their expense ratios are exactly the same (0.04%).

VOO is more tax efficient than VTSAX.

Our recommendation—first, ask yourself what exposure you’d like to gain.  If you’d like to cover the entire US stock market, consider VTSAX or one of its alternatives.  If you’re focused on S&P 500, VOO may be a better choice. 


17.  Compare and contract: VTSAX vs SPY (i.e., SPY vs VTSAX).

SPY is an S&P 500 ETF, while VTSAX is a mutual fund.  SPY is in many respects similar to VOO—but it has a higher cost ratio.

Here is a comparison table with all key metrics. 

 

SPY

VTSAX

Security Type

ETF

Mutual fund

Segment

Equity: U.S.   - Large Cap

U.S. Equity:   Large Blend

Net Assets

$235.39B

$170.10B

Expense Ratio

0.09%

0.04%

Management   Style

N/A

passive   (index-based)

Minimum   Investment

N/A

$10,000

YTD Return

13.99%

13.95%

1-Year Return

18.50%

18.63%

3-Year Return

10.69%

10.69%

5-Year Return

14.09%

14.18%

1-Year Tax   Cost

0.86%

0.78%

 

18.  Compare and contract: VTSAX vs FSTVX (i.e., FSTVX vs VTSAX).

FSTVX seeks to provide investment results corresponding to the total return of a broad range of United States stocks.  The Fund invests at least 80% of its assets in common stocks included in the Wilshire 5000 Total Market Index, which represents the performance of a broad range of U.S. stocks.

The Wilshire 5000 is a market-capitalization-weighted index of the market value of all stocks actively traded in the US.  The index is intended to measure the performance of most publicly traded companies headquartered in the United States.

FSTVX has ~3,400 stocks as its holdings. 

FSTVX and VTSAX are similar performance wise.  Both require a minimum $10K investment.  VTSAX is slightly less expensive and more cost-efficient than FSTVX.

 

FSTVX

VTSAX

Segment

U.S. Equity:   Large Blend

U.S. Equity:   Large Blend

Net Assets

$24.50B

$170.10B

Expense Ratio

0.05%

0.04%

Minimum   Investment

$10,000

$10,000

YTD Return

13.93%

13.95%

1-Year Return

18.67%

18.63%

3-Year Return

10.71%

10.69%

5-Year Return

14.15%

14.18%

1-Year Tax   Cost

0.91%

0.78%


Our recommendation—the two funds accomplish a similar objective.  VTSAX is slightly more effective (it’s cheaper and more tax efficient).  If your money manager is Vanguard, go with VTSAX.  If you keep your money at Fidelity, FSTVX might be better for you. 


19. Can you suggest some helpful resources for learning about index funds?

The video below is a helpful place to start with if you’re looking to learn about index mutual funds and ETFs, such as VTSAX.

One caveat: the video focuses on Vanguard index funds, which are an excellent place to start for those who are interested in index investing.  iShares and Schwab offer very attractive products/choices as well. Per our analysis of over 2,000 ETFs solid in the US, Vanguard index funds have some of the lowest expense ratios in the industry.  Low expense funds are a logical choice; high expense funds could be costing you a significant amount of money in the long run. 

Here are the Vanguard mutual funds recommended in this video: 

  • Vanguard Total Stock Market Index Fund (VTSAX)
  • Vanguard Total International Stock Index Fund (VTIAX)
  • Vanguard Total World Stock Index Fund (VTWSX)

And here are the recommended Vanguard index ETF funds: 

  • Vanguard Total Stock Market ETF (VTI)read our complete review here
  • Vanguard Total International Stock ETF (VXUS)read our complete review here
  • Vanguard Total World Stock ETF (VT)

Questions or comments? Send us your questions and thoughts to: hi [at] finstead [dot] com.

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