Why VTSAX is The Largest, Most Popular Index Fund

VTSAX
Fund Inception 1992
Dividend (TTM) $1.37
Expense Ratio 0.04%
Number of Stocks 3,755
Top 10 Holdings 22.1%
Foreign Holdings 0.0%

The Vanguard Total Stock Market Index Fund (VTSAX) is the most popular investment product available today. VTSAX currently has a net asset value of over $1 Trillion making it the largest index fund in the world.

VTSAX is Vanguard’s Total Stock Market Index Fund. VTSAX was created in 1992 and is designed to provide investors exposure to the entire U.S. stock market by tracking the performance of the CRSP US Total Market Index.

Investing in VTSAX is akin to investing in the total American economy. The low-fee nature and broad exposure of VTSAX have allowed it to become the most popular index fund in the world.

Continue reading to learn more about what makes VTSAX the most popular long-term investment.

A line chart of VTSAX stock price since inception.

A line chart of VTSAX stock price since inception.

Why VTSAX is the most popular long-term investment

7 reasons VTSAX is a popular investment:

  1. Low fees

  2. Diversification

  3. Set it and forget it

  4. Easy to understand

  5. A reputation of quality

  6. Not actively managed

  7. History of increasing in value over the long-term

VTSAX has a history of market returns during good and bad times

Here are the returns that VTSAX has posted over the 1-, 3-, 5-, 10-year, and since inception:

1-Year: 51.05%

3-Year: 18.95%

5-Year: 17.67%

10-Year: 14.02%

Since Inception (1992): 8.28%

VTSAX has returned 8% per year on average over the long run. This type of dependable figure is used to calculate your financial independence number or the number at which you will be able to pay yourself in retirement instead of relying on earned income from an employer.

Major stock market events that occurred since 2000:

  • 2001: 8-month recession (dot-com bust) and the 9/11 terrorist attacks.

  • 2003: Start of Iraq war

  • 2008/2009: The Great Recession

  • 2020: COVID-19 and Recession

VTSAX one fund portfolio

Thinking of a one-fund portfolio made up of only VTSAX? You’re not actually only investing in a single asset, but rather a basket of real estate assets. By purchasing VTSAX, you’re actually purchasing ownership shares over 3,500 stocks.

VTSAX top 10 holdings

At the time of the last update per Vanguard on 3/31/2021, here are the top 10 holdings within VTSAX:

  1. Apple Inc.

  2. Microsoft Corp.

  3. Amazon.com Inc.

  4. Alphabet Inc.

  5. Facebook Inc.

  6. Tesla Inc.

  7. Berkshire Hathaway Inc.

  8. JPMorgan Chase & Co.

  9. Johnson & Johnson

  10. Visa Inc.

"Don't look for the needle in the haystack. Just buy the haystack." -John Bogle

VTSAX portfolio growth forecast

Let’s say you’re able to max out an IRA each year at $6,000 where you invest your money in VTSAX for 20-years. You’d have about $300,000 in your retirement account.

An image of VTSAX compounded at 8% interest for 20-years.

An image of VTSAX compounded at 8% interest for 20-years.

If you invest in VTSAX for the next 40-years, you could have a portfolio value of over $1.6 million

An image of VTSAX compounded at 8 interest for 40-years.

An image of VTSAX compounded at 8 interest for 40-years.

"Investing is not nearly as difficult as it looks. Successful investing involves doing a few things right and avoiding serious mistakes." -John Bogle

Interest in VTSAX is growing rapidly

It’s no wonder why the price of VTSAX continues to increase over time. The net asset value is over $1.2 Trillion and it’s the most recommended long-term investment among the personal finance community.

The image below is the Google Trends result for “VTSAX.” As you can see, interest in VTSAX has been growing significantly over the past decade.

an image of vtsax interest over time from google trends.

an image of vtsax interest over time from google trends.

VTSAX Minimum Investment

VTSAX has a minimum initial investment of $3,000. Each subsequent investment no longer has that minimum requirement. The minimum investment of VTSAX can also be avoided if you’re employer provides access through their 401k plan.

Summary

If you want a single fund portfolio you can’t beat the benefits of the Vanguard Total Stock Market Index Fund (VTSAX):

  • Passiveness

  • Diversification

  • Low investment minimum

  • History of 8 percent market returns

You don’t have to keep a single fund portfolio. in fact, many investors like to keep a core position in an index fund like VTSAX to anchor their investment portfolio. You can start with a low-fee index fund like VTSAX and add additional funds, stocks, or bonds at a later date. You’re in control of your investment decisions.

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