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Vanguard Index Fund Now Accounts for 10% of Assets in US ETFs, Mutual Funds

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The Vanguard Total Stock Market Index Fund has grown to be considered as a third stock market unto itself after accounting for 10% of all assets in American stock mutual funds and ETFs, WSJ reported.

The fund surpasses any other mutual fund or exchange-traded fund, followed only by the $821-billion Vanguard S&P 500 index fund, according to data released by Morningstar Inc.

The fund is tied to the CRSP US Total Market Index, developed at the University of Chicago’s Booth School of Business. The CRSP index consists of over 4,000 stocks, covering microcap stocks to blue chips.

The CRSP index covers for-profit US businesses with a stock market value of at least $15 million and at least 12.5% of their shares outstanding traded publicly. Stocks are added and dropped every quarter, reflecting IPOs and secondary offerings.

CRSP Chief Executive David Barclay said steps have already been taken to cut down the impact of trading by funds such as Vanguard, as it adds new stocks over a five-day period rather than simultaneously during the quarterly rebalancing.

The Vanguard fund’s assets have expanded by ten times since 2009, with its current size equivalent to roughly 2.8$ of the entire American stock market. VTSAX is down 1.09%.

 

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