For investors who may not have heard, U.S. equity exchanged traded fund (ETF) Vanguard Total Stock Market Index (NYSE:VTI) just passed the $1-trillion mark in terms of assets. This is an incredible milestone many investors were wondering when the ETF would cross. This is perhaps the most commonly traded and widely-known ETF in the world, tracking the broad U.S. stock markets. This is a great ETF, and one I have written about previously.
There are a number of reasons why Canadian investors would be well-served by adding some exposure to VTI. Diversification is probably the best reason for owning this ETF. Many Canadian investors are simply too under-diversified in terms of global holdings, particularly those in the U.S. that have outperformed Canadian stocks for decades. Higher growth rates, more inclusive investing environments, and a heavy focus on technology rather than the energy-housing-financials dominance in Canada are key reasons for this.
This ETF has never had a year of outflows since its inception in 1992, an incredible fact. The ETF has been about as steady as an investor could hope for, replicating the long-term returns of the broad stock market. This makes this ETF a great holding for passive investors who want to take advantage of the roughly 7% long-term average growth rate of equities, or active investors who want to build a solid portfolio base.
This ETF has a very low management expense ratio and is very affordable for the average retail investor, making this a great way to get started with investing.
Invest wisely, my friends.