I would still save $ overall even though the International fund is more than my current.
So before I changed anything I wanted some input on IWV vs. VG Total Stock Market, and whether I would need to add a Small Cap fund also.
Thanks in Advance for any help. I really appreciate this forum.
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Here is how I would approach it. Let's start with the names of the funds. Which, by the way, might have been helpful to include in your posting.
a) IWV is the iShares Russell 3000 Index ETF.
b) VTSMX is the Vanguard Total Stock Market Index Fund.
So they both seem to be index funds. What is the actual name of the index they track, and what's in the index? I would probably Google on the name of the fund, or the ticker symbol, and look for the fund company's own descriptive page. In this case, the first Google hit on IWV is a paid placement for iShares, and when I click on it I get to
iShares Russell 3000 ETF
When I search on VTSMX, the third or fourth Google hit is to a personal.vanguard.com address, so that sounds good, and it gets me to:
Vanguard Total Stock Market Index Fund Investor Shares (VTSMX), Also available as a lower-cost Admiral™ Shares mutual fund and an ETF.
I make a mental note to check out those "lower-cost shares" later. For now, I am just trying to figure out how the funds compare.
IWV says that it provides exposure to "Large-, mid- and small-cap U.S.stocks," and holds 2972 stocks. Very annoyingly many of the tabs are available only to people who've registered, but before doing anything rash I see that "documents" isn't, and I see a "fund fact sheet" which seems like a good place to start. The Fact Sheet tells me, as if I hadn't already guessed, that the fund tracks the Russell 3000. But it also tells me that
In short, it is a cap-weighted index of the 3000 largest companies, i.e. the broad or total market.The Index measures the performance ol the broad U.S4 equity market... The Index is capitalizatlon welghted and consists of the 3000 largest companies domiciled in the U.S. and its territories. Component companies are adjusted ior available float and must meet objective criteria for inclusion to the Index‘ Reconstitution is annual.
Vanguard says that VTSMX provides "exposure to the entire U.S. equity market, including small-, mid-, and large-cap growth and value stocks," that it holds 3306 stocks. Clicking around under "Portfolio and Management" there's a link for "Strategy and Policy," which says that the fund
In short, both of the funds are trying to do the same thing. They bothThe fund employs an indexing investment approach designed to track the performance of the MSCI US Broad Market Index, which represents approximately 99.5% or more of the total market capitalization of all the U.S. common stocks regularly traded on the New York Stock Exchange and the Nasdaq over-the-counter market.
*track "broad market indexes"
*include companies of all sizes, large, medium, and small
*don't select by sector or anything else; the only selection criterion is that it be a U.S. company
*hold about the 3000 biggest companies, "cap-weighted" (in proportion to the total market value of all the shares of stock each company has issued.
But the indexes and index providers are slightly different. So are other details like expense ratios, which I'll leave to you to figure out.
Now for the growth chart. I love growth charts. You can get these from Morningstar along with a whole lot of other information about the funds, and you do not need to be a paid member or even a free member. It's only their analysts' opinions that you need to pay for. One trick when comparing funds and ETFs is to always begin with a mutual fund, which causes it to present a growth chart, to which you can then added ETFs for which it normally would present price charts instead. The growth chart shows what would happen if you invested $10,000 into a fund and just let it accumulate, reinvesting dividends. It is my pigheaded stubborn belief that this is the single most useful thing a buy-and-hold investor can look at, because it corresponds to what you actually do, and because it shows you the whole picture instead of peeking through 1, 3, 5, and 10-year knotholes.
I haven't looked yet, but here's what I expect to see. Since these two products track a broad market index of the whole U.S. stock market, I expect to see two curves that come very close to overlaying each other. Here goes. Oh, I'm going to tinker with the chart to push the starting date back as far as possible, which probably means to the inception of IWV. OK, here goes.
As a Vanguard fan, naturally I am pleased that Vanguard won (and might have won by more if we'd used Admiral shares) but THAT IS NOT THE POINT. The point is that the dynamics are exactly the same. Connoisseurs might be able to tell you what the difference in the indexes is and why they think one is better, or what will happen when Vanguard changes index providers which they are about to do, etc. etc. But both funds do the same thing. They go up at the same time. They go down at the same time. They go up and down by the same amount. One wouldn't didn't give you an easier ride through 2008-2009, one didn't zig when the other zagged. Whatever job you want the fund to do in your portfolio, either would have done it.
Oh, OK, it looks as if VTSMX did it very very very slightly better. Doing the math, though, over the period shown the difference is about 0.33% annualized.
That's way more info than I was able to find. I am pretty sure I'm going to switch as even though it uses the IWV ETF (ER .035) as opposed to a mutual fund for the Total stock index it is even more cheaper than my current combo of an S&P 500 index and a Small Cap Index at .44 and .57 respectively.
Over the next 15 years its definitely going to make it worth it!
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