Stupid question about VTSAX

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misterg
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Joined: Fri Sep 29, 2017 8:15 pm

Stupid question about VTSAX

Post by misterg » Mon Dec 11, 2017 7:44 pm

If you own VTSAX, do you own the underlying stocks? Or, do you own an index that tracks the stocks?

Thesaints
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Re: Stupid question about VTSAX

Post by Thesaints » Mon Dec 11, 2017 7:50 pm

IN the case of VTSAX it is the stocks.

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FrugalYankee
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Re: Stupid question about VTSAX

Post by FrugalYankee » Mon Dec 11, 2017 8:20 pm

You own the mutual fund that mimics the index.

GLState
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Joined: Wed Feb 15, 2017 10:38 am

Re: Stupid question about VTSAX

Post by GLState » Mon Dec 11, 2017 8:30 pm

You can see the all of the stocks held by the Vanguard Total Market fund as of 10/31/2017 here:
https://personal.vanguard.com/us/FundsA ... irect=true

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DaftInvestor
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Re: Stupid question about VTSAX

Post by DaftInvestor » Mon Dec 11, 2017 9:22 pm

You own the mutual fund that mimics the index by holding a large number of stocks in the index.

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David Jay
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Re: Stupid question about VTSAX

Post by David Jay » Mon Dec 11, 2017 9:55 pm

Both sides of the replies are correct in their own way.

1. The mutual fund invests your money in actual stocks, so you hold real assets. These assets are held by a third party so in the event of a mutual fund company failure you can recover your assets.

2. They are allowed to do some "adjustments" around the edges - think of small companies with no available stock to purchase - so they may not actually hold the exact number or relative quantity of stocks in the index.
Prediction is very difficult, especially about the future - Niels Bohr | To get the "risk premium", you really do have to take the risk - nisiprius

MrJones
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Re: Stupid question about VTSAX

Post by MrJones » Mon Dec 11, 2017 10:44 pm

It's not quite either. From
https://www.investor.gov/investing-basi ... tual-funds

A mutual fund is a company that pools money from many investors and invests the money in securities such as stocks, bonds, and short-term debt. Investors buy shares in mutual funds. Each share represents an investor’s part ownership in the fund and the income it generates.


Note that each Vanguard fund is a separate company.

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