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The Short Answer

Is One ETF Enough?

When building a portfolio using broadly diversified ETFs from Vanguard or other shops, consider costs and allocation.

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Question: I want to use Vanguard index funds for U.S.-stock exposure and am trying to decide between investing in  Vanguard Total Stock Market ETF (VTI) or a combination of the  Vanguard S&P 500 ETF (VOO) and  Vanguard Extended Market Index ETF (VXF). I know the first one is cheaper, but are there any downsides to using that alone?

Answer: The broadly diversified domestic-stock exchange-traded fund, Vanguard Total Stock Market ETF, and its mutual fund sibling,  Vanguard Total Stock Market Index (VTSMX), hold an undeniable appeal that have helped them collectively grow into the biggest funds in the world, with more than $300 billion in assets. Their low expense ratios, exposure to virtually all publicly traded U.S. stocks, and well-regarded parent company make them the default choice for many investors.

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Adam Zoll does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.