Global Diversification With VTWAX - Vanguard Total World Index Fund

VTWAX
Fund Inception 2019
Dividend (TTM) $0.55
Expense Ratio 0.10%
Number of Stocks 9,045
Top 10 Holdings 13.7%
Foreign Holdings 42%

The Vanguard Total World Stock Market Index Fund (VTWAX) is a globally diversified index fund. Created in 2019, VTWAX has a net asset value of over $28 billion making it a popular global index fund.

VTWAX is Vanguard’s Total World Stock Market Index Fund. VTWAX was created in 2019 and is designed to provide investors low-cost exposure to the United States, developed foreign markets, and emerging markets.

Investing in VTWSAX will provide the investor with a globally diversified stock portfolio. 42 percent of the net assets are held in foreign stock. The low-fee nature and broad diversification have made VTWAX a popular total world index fund.

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

A LINE CHART OF VTWAX STOCK PRICE SINCE INCEPTION.

A LINE CHART OF VTWAX STOCK PRICE SINCE INCEPTION.

Why do investors like VTWAX?

6 reasons VTWAX is a popular investment:

  1. Low fees

  2. Global diversification

  3. Set it and forget it

  4. Easy to understand

  5. A reputation of quality

  6. Not actively managed

VTWAX performance history

Because VTWAX is a relatively new investment product, we have to use its ETF equivalent (VT) in order to determine historical performance.

Here are the returns that the Vanguard Total World Stock ETF has posted over the 1-, 3-, 5-, 10-year, and since inception:

1-Year: 48.92

3-Year: 13.58%

5-Year: 14.25%

10-Year: 9.44%

Since Inception (2008): 7.98%

VTWAX top 10 holdings

At the time of the last update per Vanguard on 4/30/2021, here are the top 10 holdings within VTWAX:

  1. Apple Inc.

  2. Microsoft Corp.

  3. Amazon.com Inc.

  4. Alphabet Inc.

  5. Facebook Inc.

  6. Tesla Inc.

  7. Taiwan Semiconductor Manufacturing Co. Ltd.

  8. Berkshire Hathaway Inc.

  9. Tencent Holdings Ltd.

  10. JPMorgan Chase & Co.

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

VTWAX portfolio growth forecast

Let’s say you’re able to max out an IRA each year at $6,000. Starting with zero dollars invested, after 20-years of a 7.98% interest rate, you’ll have about $295,000 in your retirement account.

AN IMAGE OF VTWAX COMPOUNDED AT 7.98% INTEREST FOR 20-YEARS.

AN IMAGE OF VTWAX COMPOUNDED AT 7.98% INTEREST FOR 20-YEARS.

Let’s say you had amazing parents who taught you the importance of saving and investing. You get started at a young age and max out a Roth IRA for 40-years. You’d have about $1.6 million in your retirement account.

AN IMAGE OF VTWAX COMPOUNDED AT 7.98% INTEREST FOR 40-YEARS.

AN IMAGE OF VTWAX COMPOUNDED AT 7.98% 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 VTWAX is growing rapidly

The image below is the Google Trends result for “VTWAX.” As you can see, interest in VTWSAX has been growing significantly during its relatively short lifespan.

AN IMAGE OF VTWAX INTEREST OVER TIME FROM GOOGLE TRENDS.

AN IMAGE OF VTWAX INTEREST OVER TIME FROM GOOGLE TRENDS.

VTWAX Minimum Investment

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

ETF Alternative to VTWAX

The Vanguard Total World Stock ETF (VT) is the ETF alternative to VTWAX. Vanguard ETFs trade like a traditional stock for the minimum initial investment of 1 share. They track the same benchmark, have the same fees, provide the same distributions, etc.

Summary

If you want a single fund portfolio VTWAX can provide global diversification in addition to low fees and strong historical performance (when considering VT ETF).

VTWAX Benefits:

  • Passiveness

  • Global diversification

  • Low investment minimum

  • Benchmark 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 VTWAX to anchor their investment portfolio. You can start with a low-fee index fund like VTWAX and add additional funds, stocks, or bonds at a later date. You’re in control of your investment decisions.

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