Building VTSAX out of Russell indexes

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m@ver1ck
Posts: 128
Joined: Fri Sep 14, 2018 2:18 pm

Building VTSAX out of Russell indexes

Post by m@ver1ck » Fri May 10, 2019 9:15 am

In one of other forum posts, I learnt that it is possible to approximate VTSAX by using S&P500 and Vanguard Extended Market in a 4:1 ratio.

Looking at my 401K, I notice that I have access to Russel 1000 growth, Russel 1000 value - which probably provide access to the top 1000 stocks, when combined, and also Russell 2000 Growth (which is bottom 2000 stocks - but unfortunately growth) - as well as DFA 2000 small/mid value.
In addition, I do have access to S&P 500 in my 401K.

I looked at the prospectuses but was unable to come up with a similar ratio math to approximate VTSAX.

Anyone know this off the top of your heads?
Thanks, as always.

stan1
Posts: 7706
Joined: Mon Oct 08, 2007 4:35 pm

Re: Building VTSAX out of Russell indexes

Post by stan1 » Fri May 10, 2019 9:26 am

Do you have any total market index funds? Or just the Russell 1000 Value and Growth?

If you have an S&P 500 fund I'd just do that. The difference between S&P 500 and Total Stock Market is negligible and won't be known in advance.

carmonkie
Posts: 149
Joined: Fri Jun 29, 2018 4:31 pm

Re: Building VTSAX out of Russell indexes

Post by carmonkie » Fri May 10, 2019 9:32 am

I did a quick 80% S&P / 20% DFSVX (assuming that is the ticker for the DFA) backtest in Potfolio Visualizer vs 100% VTSAX and the correlation, return, std deviation are almost identical. It looks like the same 4:1 ratio would work with S&P and the DFA fund.

https://www.portfoliovisualizer.com/
back-test portfolio..

MotoTrojan
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Re: Building VTSAX out of Russell indexes

Post by MotoTrojan » Fri May 10, 2019 10:34 am

I’d also just use the S&P500 alone assuming it’s a low cost fund. You won’t notice the difference compared to VTSAX.

TropikThunder
Posts: 1847
Joined: Sun Apr 03, 2016 5:41 pm

Re: Building VTSAX out of Russell indexes

Post by TropikThunder » Fri May 10, 2019 1:21 pm

MotoTrojan wrote:
Fri May 10, 2019 10:34 am
I’d also just use the S&P500 alone assuming it’s a low cost fund. You won’t notice the difference compared to VTSAX.
+1. You’ll drive yourself nuts tinkering with the four funds (Large Value, Large Growth, Small Value, Small Growth) trying to match Total Stock Market and obsessing when one piece of that lags. The simplest option is to just use the S&P500 fund and call it a day. If your completionist self insists, you can add an S&P Extended Market index in an IRA. They don’t have to be in the same account.

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Phineas J. Whoopee
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Re: Building VTSAX out of Russell indexes

Post by Phineas J. Whoopee » Fri May 10, 2019 2:12 pm

This wiki article may help with your question: Approximating total stock market.
PJW

TropikThunder
Posts: 1847
Joined: Sun Apr 03, 2016 5:41 pm

Re: Building VTSAX out of Russell indexes

Post by TropikThunder » Fri May 10, 2019 2:15 pm

Phineas J. Whoopee wrote:
Fri May 10, 2019 2:12 pm
This wiki article may help with your question: Approximating total stock market.
PJW
He doesn’t have Large Cap Blend or Small Cap Blend funds.

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