Picking the right total market fund could be the easiest way to add an extra $1 million to your portfolio.
Take iShares Core S&P Total U.S. Stock Market ETF (ITOT), for example. Recently, it’s been making headlines for its low expense ratio and stellar tracking of the S&P Total Market Index. Whether you’re a seasoned investor or just starting out, ITOT highlights the kind of opportunities total market funds offer.
If you own an index fund, you’re probably happy with how it’s performing. A no-load index fund with low expenses? That’s already a solid move. But what if you could take it up a notch and get even more out of your investments—without timing the market or chasing active management?
Total market funds might just be your ticket. These funds capture everything—from the Apples and Microsofts of the world to the smaller, up-and-coming companies making waves. They’re not just passive investment tools; they’re versatile, efficient ways to grow your portfolio.
What to Look For in a Total Market Fund
- Expense Ratios Low fees mean more money stays in your account. Vanguard’s Total Stock Market Index Fund (VTSAX) charges just 0.04% annually, making it one of the most cost-effective options.
- Tracking Accuracy A good fund mirrors its benchmark closely. Schwab’s Total Stock Market Index Fund (SWTSX) is known for this, ensuring you’re not missing out on market returns.
- Tax Efficiency ETFs like iShares Core S&P Total U.S. Stock Market ETF (ITOT) are designed to minimize taxable events. For taxable accounts, this can make a big difference.
- Liquidity Bigger funds, like Fidelity Total Market Index Fund (FSKAX), tend to have better liquidity. This means lower trading costs and smoother transactions.
- Reinvestment Options Funds like SPDR Portfolio Total Stock Market ETF (SPTM) allow automatic reinvestment of dividends, helping your investment compound over time.
- Reputation Stick with trusted names. Vanguard, Schwab, and Fidelity are all leaders in the field for a reason—reliable performance and investor-focused offerings.
Why Total Market Funds Make Sense
Imagine owning a slice of nearly every U.S. company. That’s what total market funds offer. They make diversification easy, spreading risk across industries and company sizes. Plus, their low fees and passive management mean less money wasted on overhead.
Over decades, these features can translate to substantial growth. Whether you’re saving for a goal or just aiming to grow your investments, total market funds simplify the process and deliver results.
The Bottom Line
Choosing the right total market fund is about matching it to your needs. Look for low fees, strong tracking, and a good reputation. With the right fund, you can invest confidently and let the market do the heavy lifting.
