Approximating Total Stock Market

From Bogleheads

Investors wishing to invest in Vanguard Total Stock Market Index Fund often face a situation where they have to approximate it with the funds available in their employer sponsored plans and quite possibly some other funds available in other accounts such as a Roth IRA.

This page shows a few examples of approximating Vanguard Total Stock Market Index Fund with funds covering specific parts of the market.

Examples

Funds	Morningstar Style Box
100% Vanguard Total Stock Market Index Fund (VTSMX) (0.15%)	24 25 23 6 7 7 3 3 3
80% Vanguard 500 Index Fund (VFINX) (0.15%) 20% Vanguard Extended Market Index Fund (VEXMX) (0.24%) Note: This 80/20 ratio is also shown on the Vanguard Benchmark Statistics page.	24 25 23 6 7 7 3 3 3
81% Vanguard 500 Index Fund (VFINX) (0.15%) 6% Vanguard Mid-Cap Index Fund (VIMSX) (0.21%) 13% Vanguard Small-Cap Index Fund (NAESX) (0.22%)	24 25 22 6 7 6 3 3 3
83% Vanguard 500 Index Fund (VFINX) (0.15%) 17% Vanguard Small-Cap Index Fund (NAESX) (0.22%)	25 26 22 5 6 5 4 4 4
86% Vanguard 500 Index Fund (VFINX) (0.15%) 14% iShares Russell 2000 Index (IWM) (0.20%)	26 27 23 4 4 3 4 4 5
82% Vanguard 500 Index Fund (VFINX) (0.15%) 11% iShares S&P MidCap 400 Index (IJH) (0.20%) 7% iShares S&P SmallCap 600 Index (IJR) (0.20%)	24 25 22 6 7 7 3 3 2
85% Vanguard 500 Index Fund (VFINX) (0.15%) 15% Vanguard Tax-Managed Small-Cap Fund Inv (VTMSX) (0.13%)	25 26 23 5 4 4 3 5 4
88% Vanguard Large Cap Index Fund (VLACX) (0.20%) 12% Vanguard Small-Cap Index Fund (NAESX) (0.22%)	24 25 23 6 7 7 3 3 3

• These percentages were computed on Aug 16, 2008.
• The style box numbers were computed by Morningstar Instant XRay.
• Computation was done by the method of least squares.
• Investors contemplating on using an S&P MidCap 400 fund, for example, may consider the example above that uses IJH. However, there may be slight implementation differences between the S&P MidCap 400 fund you have access to and IJH.
• Two funds may appear to track the same portion of the market (say, mid-cap), but their holdings may differ depending on the indexes they track.

How to Cite

You can link to this page from the Bogleheads Forum by copying and pasting the following text into your forum posting:

Please see [url=http://www.bogleheads.org/wiki/Approximating_Total_Stock_Market]Approximating Total Stock Market[/url] on the [url=http://www.bogleheads.org/wiki/Main_Page]Bogleheads Wiki[/url].

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US Stocks
Stock Topics	Stock Basics • Preferred stock • Approximating Total Stock Market • Domestic Small Cap Value
Research Resources	Vanguard SEC Filings: U.S. Stock Index Funds