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Approximating Total Stock Market - Bogleheads

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.

US Stocks

Examples

Stock Topics Stock Basics Slice and Dice Approximating Total Stock Market Mid caps Small caps Domestic Small Cap Value Preferred stock Research Resources Vsnguard SEC filings
V T E (http://www.bogleheads.org/w/index.php?title=Template:US_Stocks_sidebar&action=edit)

Funds

Morningstar Style Box 24 24 6 3 24 7 3

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100% Vanguard Total Stock Market Index Fund (VTSMX) (0.15%) (https://personal.vanguard.com/us/funds/snapshot? FundId=0085&FundIntExt=INT) [1]

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Approximating Total Stock Market - Bogleheads

80% Vanguard 500 Index Fund (VFINX) (0.15%) (https://personal.vanguard.com/us/funds/snapshot? FundId=0040&FundIntExt=INT) 20% Vanguard Extended Market Index Fund (VEXMX) (0.24%) (https://personal.vanguard.com/us/funds/snapshot? FundId=0098&FundIntExt=INT) Note: This 80/20 ratio is also shown on the Vanguard Benchmark Statistics (https://personal.vanguard.com/us/funds/tools/benchmarkstatistics) page. 81% Vanguard 500 Index Fund (VFINX) (0.15%) (https://personal.vanguard.com/us/funds/snapshot? FundId=0040&FundIntExt=INT) 6% Vanguard Mid-Cap Index Fund (VIMSX) (0.21%) (https://personal.vanguard.com/us/funds/snapshot? FundId=0859&FundIntExt=INT) 13% Vanguard Small-Cap Index Fund (NAESX) (0.22%) (https://personal.vanguard.com/us/funds/snapshot? FundId=0048&FundIntExt=INT) 83% Vanguard 500 Index Fund (VFINX) (0.15%) (https://personal.vanguard.com/us/funds/snapshot? FundId=0040&FundIntExt=INT) 17% Vanguard Small-Cap Index Fund (NAESX) (0.22%) (https://personal.vanguard.com/us/funds/snapshot? FundId=0048&FundIntExt=INT)

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26 86% Vanguard 500 Index Fund (VFINX) (0.15%) (https://personal.vanguard.com/us/funds/snapshot? FundId=0040&FundIntExt=INT) 14% iShares Russell 2000 Index (IWM) (0.20%) (http://www.ishares.com/product_info/fund/overview/IWM.htm) 4 4

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82% Vanguard 500 Index Fund (VFINX) (0.15%) (https://personal.vanguard.com/us/funds/snapshot? FundId=0040&FundIntExt=INT) 11% iShares S&P MidCap 400 Index (IJH) (0.20%) (http://www.ishares.com/product_info/fund/overview/IJH.htm) 7% iShares S&P SmallCap 600 Index (IJR) (0.20%) (http://www.ishares.com/product_info/fund/overview/IJR.htm) [2]
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Approximating Total Stock Market - Bogleheads

85% Vanguard 500 Index Fund (VFINX) (0.15%) (https://personal.vanguard.com/us/funds/snapshot? FundId=0040&FundIntExt=INT) 15% Vanguard Tax-Managed Small-Cap Fund Inv (VTMSX) (0.13%) (https://personal.vanguard.com/us/funds/snapshot? FundId=0116&FundIntExt=INT)

25 5 3

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88% Vanguard Large Cap Index Fund (VLACX) (0.20%) (https://personal.vanguard.com/us/funds/snapshot? FundId=0307&FundIntExt=INT) 12% Vanguard Small-Cap Index Fund (NAESX) (0.22%) (https://personal.vanguard.com/us/funds/snapshot? FundId=0048&FundIntExt=INT)

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24 92% iShares Russell 1000 ETF (IWB) (0.15%) (http://us.ishares.com/product_info/fund/overview/IWB.htm) 8% iShares Russell 2000 ETF (IWM) (0.23%) (http://us.ishares.com/product_info/fund/overview/IWM.htm) [3] 6 3

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24 82% John Hancock 500 Index (JEINX) 11% John Hancock Mid Cap Index (JECIX) 7% John Hancock Small Cap Index (JESIX)[4] 6 3

24 6 3

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These percentages were computed on Aug 16, 2008, except where otherwise noted. The style box numbers were computed by Morningstar Instant XRay (http://portfolio.morningstar.com/NewPort/Free/InstantXRayDEntry.aspx) . Computation was done by the method of least squares (http://en.wikipedia.org/wiki/Least_squares) .
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Approximating Total Stock Market - Bogleheads

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.

References
1. Morningstar Instant X-Ray (http://portfolio.morningstar.com/NewPort/Free/InstantXRayDEntry.aspx) of VTSMX updated 11 January 2013. 2. Last calculated on 03 January 2013. 3. The ratio for the Russell 1000 and 2000 funds was calculated 03 Jan 2013. See Boglehead Forum Thread (http://www.bogleheads.org/forum/viewtopic.php?f=1&t=107346#p1571134) for more on combining these two funds to approximate total stock market. 4. Calculated in Morningstar X-Ray on Feb. 27, 2013. This combination is likely only of interest to investors with a 401(k) plan held at John Hancock Funds.

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V T E (http://www.bogleheads.org/w/index.php?title=Template:US_Stocks&action=edit) US stocks

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Stock Topics Research Resources

Stock Basics Slice and Dice Approximating Total Stock Market Mid caps Small caps Domestic Small Cap Value Preferred stock Vanguard SEC Filings: U.S. Stock Index Funds

Retrieved from "http://www.bogleheads.org/w/index.php?title=Approximating_Total_Stock_Market&oldid=34809" Categories: Asset Allocation US Stocks Vanguard This page was last modified on 27 February 2013, at 13:41. This page has been accessed 25,197 times. Content is available under GNU Free Documentation License 1.2.

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