Vanguard Total World Index Explained [VTWAX | VT ETF]
The Vanguard Total World Stock Index (VT ETF | VTWAX) has over 9,000 stocks across 49 markets! We discuss the details and pros/cons of using this index versus investing in US and International indexes separately.
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VTWAX Prospectus: https://personal.vanguard.com/us/face...
FTSE Global All Cap Index Fact Sheet: https://research.ftserussell.com/Anal...
US Code (Foreign Tax Credit):
https://www.law.cornell.edu/uscode/te...
--- Outline
00:00 Intro
The Vanguard Total World Stock Index (VT ETF | VTWAX) has exposure to over 9,000 stocks across 49 markets around the world! We discuss the details and pros/cons of using this index versus investing in US and International Indexes separately.
00:59 Principal Investment Strategies
This fund tracks the FTSE Global All Cap Index. This is a market-cap weighting index representing performance of large, medium, and small companies in both developed and emerging markets. We discuss what this means.
03:10 Principal Risks
This fund has several risks outlined in the prospectus. We discuss some of these risks.
04:05 Portfolio Composition
We take a look at the construction of the portfolio, including: regional allocations, country allocations, and top companies.
05:09 Expense Ratio
The expense ratio of VTWAX is 0.1%, which is $1 per year for every $1,000 invested. VT ETF is 0.08% which is $0.80 for every $1,000.
05:51 Performance
Since the VT ETF was created in 2008, it has delivered an annualized return of 7.69%. The 10 year annual return is 9.46%. We look at how this compares to the US Stock Index (VTSAX / VTI).
07:04 Principles of Index Investing
We briefly discuss the core principles of index investing, which are relevant to a global market-cap weighting.
08:14 Pros & Cons
We discuss the pros and cons of using this single Total World Stock Index.
13:39 VTWAX != VTSAX + VTIAX (VT != VTI + VXUS)
While you could invest in separate US & International indexes, they aren’t EXACTLY the same as VTWAX.
14:50 My Thoughts
I think the choice of using the Total World Stock Index versus separate US and International Indexes boils down to optimizing for time or a possible slightly higher return. I explain why I have this opinion and the decision I made for my portfolio.
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Disclaimer: I am not a financial advisor. My videos are for educational purposes and are my opinions. You should seek advice from a professional advisor or perform your own research. There is no guarantee you will be successful following my opinions.