VTI: Truly Passive Investing In The U.S. Market
January 6, 2023
- In this article, I examine how investors can get truly passive exposure to the US equity market.
- Passive investing emerged from academia and offers benefits through diversification, low fees, and historically better performance than the average active manager.
- To passively invest in US equities, we need a market cap-weighted portfolio of all investable US stocks.
- One proxy for that is the CRSP U.S. Total Market Index which currently consists of slightly more than 4,000 stocks – 8 times more than the S&P 500.
- Historically, VTI followed this index with almost no tracking error and is thus among the best instruments to invest truly passively in US equities.
- SA #18: RPV – ‘Pure Value’ Is Indeed More Value Than ‘Value’
- SA #17: IUSV – Transparent Value With Modest Active Risk
- SA #16: IWD – Low Growth Is Not Necessarily Value – Also For Large Caps
- SA #15: VLUE – Transparent Value With Little Industry Bets
This content is for educational and informational purposes only and no substitute for professional or financial advice. The use of any information on this website is solely on your own risk and I do not take responsibility or liability for any damages that may occur. The views expressed on this website are solely my own and do not necessarily reflect the views of any organisation I am associated with. Income- or benefit-generating links are marked with a star (*). All content that is not my intellectual property is marked as such. If you own the intellectual property displayed on this website and do not agree with my use of it, please send me an e-mail and I will remedy the situation immediately. Please also read the Disclaimer.