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Small Fry Lift Vanguard Total Stock Market

Smaller-cap stocks limit the fund's losses in 2001.


It's the little guys that have kept things from worsening at Vanguard Total Stock Market Index Fund (VTSMX).

Investors frequently criticize the fund's benchmark index, the Wilshire 5000, for not having enough exposure to smaller-cap stocks, and it's true that big companies dominate this offering's returns. Indeed, by our calculation, large caps account for more than 70% of this fund's assets. But the fund does own enough small- and mid-cap issues to distinguish its performance from that of the S&P 500, which stashes roughly 90% of assets in big companies. (And, critics might note, it owned enough smaller-cap stocks to underperform the S&P 500 by a decent margin during the 1990s--when the markets were mostly driven by large companies.)

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Scott Cooley does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.

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