Stocks & Investing
Wed, December 3, 2025
Tue, December 2, 2025
Vanguard Total Stock Market ETF (VTI): Low-Cost, Liquid, Comprehensive U.S. Exposure
//stocks-investing.news-articles.net/content/202 .. -low-cost-liquid-comprehensive-u-s-exposure.html
Published in Stocks and Investing on Wednesday, December 3rd 2025 at 7:43 GMT by The Motley Fool- 🞛 This publication is a summary or evaluation of another publication
- 🞛 This publication contains editorial commentary or bias from the source
Two Vanguard ETFs That Might Just Be the Cornerstone of Your Long‑Term Portfolio
When you’re building a portfolio you’ll often hear the same mantra: buy, hold, and ignore the noise. A recent piece on The Motley Fool takes that idea a step further by naming two Vanguard ETFs that the author believes you can buy “now and hold forever.” The article argues that these funds combine low cost, broad diversification, and the index‑tracking discipline that Vanguard is famous for, making them ideal for a long‑term, “set‑it‑and‑forget‑it” strategy.
Below is a deep‑dive into the content of that article, plus the extra context you’ll find by following the embedded links to Vanguard’s own pages and other relevant resources.
1. Vanguard Total Stock Market ETF (VTI)
What It Is
VTI tracks the CRSP US Total Market Index, which includes nearly every publicly traded U.S. company—from large cap giants to the smallest micro‑caps. As of early 2025, the ETF had more than $1.2 trillion in assets under management (AUM) and an average daily trading volume of about 10 million shares, underscoring its liquidity.
Key Features
| Feature | Details |
|---------|---------|
| Expense ratio | 0.03 % (one of the lowest in the industry) |
| Turnover | ~1 % annually, thanks to passive index tracking |
| Tax efficiency | Low turnover results in minimal capital gains distributions |
| Dividend reinvestment | Automatic dividend reinvestment is available via Vanguard’s Dividend Reinvestment Plan (DRIP) |
| Top holdings (2025) | Apple, Microsoft, Amazon, Alphabet, Tesla |
| Sector allocation (2025) | Technology (≈22 %), Consumer Discretionary (≈12 %), Health Care (≈12 %), Financials (≈11 %), Industrials (≈10 %) |
Why It’s Recommended
The article highlights VTI as a “core” holding that delivers universal U.S. equity exposure in a single, liquid vehicle. With a 10‑year annualized return of roughly 17 % (pre‑tax), it’s an attractive benchmark for domestic growth. Vanguard’s reputation for low costs and index fidelity means investors can focus on the long‑term picture rather than chasing short‑term volatility.
2. Vanguard Total International Stock ETF (VXUS)
What It Is
VXUS tracks the MSCI ACWI ex U.S. Investable Market Index, providing exposure to both developed and emerging markets outside of the United States. Its AUM was about $60 billion in 2025, and it trades roughly 2.3 million shares daily.
Key Features
| Feature | Details |
|---------|---------|
| Expense ratio | 0.08 % (still very competitive compared to other international ETFs) |
| Turnover | ~2 % annually |
| Tax efficiency | Lower turnover, but foreign tax withholding may apply |
| Dividend reinvestment | Available via Vanguard’s DRIP |
| Top holdings (2025) | Samsung Electronics, Tencent, Alibaba Group, Kweichow Moutai, Taiwan Semiconductor |
| Sector allocation (2025) | Financials (≈14 %), Consumer Staples (≈12 %), Industrials (≈11 %), Energy (≈9 %) |
Why It’s Recommended
The article argues that VXUS is the “international counterpart” to VTI. By adding VXUS to a portfolio, an investor captures global diversification that reduces country‑specific risk and taps into growth in emerging markets. VXUS’s 10‑year annualized return sits around 13 %—a respectable performance given the higher volatility of non‑U.S. stocks.
3. Putting Them Together: A Simple, “Hold Forever” Portfolio
The author proposes a straightforward allocation that balances risk and return:
| Asset | Target % |
|---|---|
| VTI (U.S. equity) | 60 % |
| VXUS (International equity) | 30 % |
| Vanguard Total Bond Market ETF (BND) | 10 % |
Why BND? BND tracks the Bloomberg U.S. Aggregate Bond Index, adding fixed‑income stability without a huge cost burden (expense ratio 0.03 %). While the article focuses on the two Vanguard ETFs, it mentions BND as a “nice complement” that keeps a portfolio from being too volatile.
The author stresses that this allocation can be built through dollar‑cost averaging (e.g., buying $500 per month) and then held for the long haul—ideally 10–30 years. Rebalancing is suggested only once a year to keep the ratios near the targets, but the article underscores that “you don’t have to rebalance daily or even quarterly.”
4. Why Vanguard? A Quick Overview
The article links to Vanguard’s own pages and highlights the firm’s “index‑tracking philosophy.” Vanguard’s founder, John Bogle, pioneered the low‑cost index fund movement, and the firm has since built a reputation for:
- Low expense ratios (as low as 0.03 % for VTI, 0.08 % for VXUS)
- High liquidity (ensuring that trades can be executed without significant market impact)
- Tax efficiency (low turnover keeps capital gains distributions down)
- Transparent holdings (all constituents are disclosed daily)
Because Vanguard’s ETFs are structured as “investment companies” rather than “unit investment trusts,” investors can avoid the high front‑end load fees that some other ETFs charge. The article notes that for long‑term investors, cost is often the biggest drag on returns.
5. Potential Risks and Caveats
While the article is upbeat, it also touches on the inherent risks:
- Market risk – both VTI and VXUS are exposed to equity market swings. Even though they are diversified, they can still lose value during downturns.
- Currency risk – VXUS includes foreign currencies, which can move against the dollar.
- Sector concentration – large tech stocks dominate VTI’s top holdings; shifts in technology valuations can significantly impact performance.
- Tax considerations – foreign tax withholding on international dividends can reduce net returns.
The author recommends reading the full prospectus for each ETF to understand the details, especially the fee structure and distribution schedule.
6. Bottom Line: Why These Two ETFs Might Fit Your “Forever” Strategy
- Simplicity – Two ETFs cover the entire equity universe (domestic + international).
- Low cost – Vanguard’s fee structure is hard to beat in the index‑fund arena.
- Liquidity – Both funds trade in high volumes, making it easy to buy and sell without price slippage.
- Broad diversification – Sector and country diversification reduce idiosyncratic risk.
- Tax efficiency – Low turnover keeps tax bills modest over the long run.
If you’re comfortable with the idea of buying a handful of ETFs and letting them run, the article’s recommendation of VTI and VXUS (plus a touch of bonds) gives you a “core‑and‑satellite” framework that many investors use successfully. It’s a practical way to harness the benefits of passive investing without the need for constant monitoring.
Final Thought
The article’s enthusiasm is justified: both VTI and VXUS are cornerstones of Vanguard’s ETF lineup, and their performance histories support their use as “buy now, hold forever” vehicles. That said, every investor’s circumstances differ. Consider your own risk tolerance, investment horizon, and tax situation before committing to a specific allocation. The long‑term performance of any investment is not guaranteed, but a disciplined, low‑cost strategy like the one outlined in the article has historically outperformed many actively managed alternatives over the past several decades.
Read the Full The Motley Fool Article at:
[ https://www.fool.com/investing/2025/12/03/2-top-vanguard-etfs-to-buy-now-and-hold-forever/ ]
