June 16, 2021 | Product News

VTI: 20 years old and still going strong

Vanguard's first-ever index ETF, Vanguard Total Stock Market ETF (VTI), celebrated its 20th anniversary in May. Known for its low cost and broad diversification, VTI has provided many of your clients with exposure to the entire U.S. equity market, including small-, mid-, and large-cap growth and value stocks.

VTI helped pave the way for low-cost, broad-market indexing in ETFs while shaping the marketplace in many ways, including:

  • Prompting the decline in industry expense ratios over time so your clients can keep more of their returns.
  • Positioning broad-market index investing as a primary choice for investors.
  • Demonstrating that tight tracking is possible at scale.
  • Changing the perception of ETFs from simple trading tools to buy-and-hold investments in client portfolios for the long term.
  • Serving as a cost- and tax-efficient starting point for constructing a well-balanced portfolio.

An impressive legacy

This is a line chart displaying the decreasing expense ratio of VTI over the past 20 years overlying a mountain chart showing VTI’s increasing assets under management (AUM) in the same period. The ETF’s expense ratio decreased from 0.15% at its inception in 2001 to 0.03% as of month day, year. The AUM increased slowly from VTI’s inception to 2011, with a large jump afterward to reach $243.8 billion as of March 31, 2021.

Source: Vanguard, as of March 31, 2021.

 

VTI, our entry into the ETF arena, helped democratize access to our investment products for all types of investors, enabling access to world-class fund management from the leader in indexing. It helped bring lower costs, better benchmark tracking, and the idea that ETFs could be stable investment vehicles to the industry.
—Rich Powers
Head of ETF Product Management

 

Twenty years ago, we burst onto the ETF scene with a unique approach to passive investing by making VTI a share class of its existing mutual fund. Last year alone saw 182 ETFs1 liquidated or merged out of existence. With closures occurring at an alarming rate, it's important to celebrate VTI's milestone and note that it helped launch one of the industry's most successful ETF franchises, bringing the power of investing in low-cost index ETFs that tightly track their benchmarks to you and your clients.

With an expense ratio of a mere 0.03% and assets reaching over $213 billion, VTI is one of the cheapest and largest index ETFs available. 2

Here's to another 20 years!

 

1 Source: FactSet.

2 Sources: Vanguard and Morningstar, Inc., as of December 31, 2020.

Notes:

  • For more information about Vanguard funds or Vanguard ETFs, obtain a prospectus (or a summary prospectus, if available) or call 800-523-1036 to request one. Investment objectives, risks, charges, expenses, and other important information are contained in the prospectus; read and consider it carefully before investing.
  • Vanguard ETF Shares are not redeemable with the issuing fund other than in very large aggregations worth millions of dollars. Instead, investors must buy and sell Vanguard ETF Shares in the secondary market and hold those shares in a brokerage account. In doing so, the investor may incur brokerage commissions and may pay more than net asset value when buying and receive less than net asset value when selling.
  • All investing is subject to risk, including the possible loss of the money you invest.
  • Prices of mid- and small-cap stocks often fluctuate more than those of large-company stocks.