If you want some exceptional diversification, you may want to consider investing in a global exchange-traded fund (ETF) which gives you exposure to a wide range of stocks from around the world. The Vanguard Total World Stock Index Fund (NYSE Arca:VT) could fit the bill.
This fund comes with a low expense ratio of just 0.07%, which is well below what most other ETFs charge. And the fund is vast, as it holds close to 9,800 stocks. And yet, despite such a high number of stocks, investors are still getting some fairly well established businesses here. The median market cap of the ETF’s holdings is over $75 billion. Big names such as Apple (NASDAQ:AAPL), Microsoft (NASDAQ:MSFT), and Amazon (NASDAQ:AMZN) were its top three holdings as of Sept. 30, 2023, accounting for less than 9% of the fund’s total.
North America is still where most (64%) of the fund’s stocks are based in but nearly 16% are in Europe, followed by more than 10% in the Pacific, and another 10% coming from emerging markets. The fund says it is “only appropriate for long-term goals,” as there can be a bit more volatility with it than with other ETFs which place a greater focus on the North American markets.
But for investors who want some deep diversification, the Total World Stock Index Fund can provide a good alternative to many other funds. Over the past 12 months, the ETF has generated returns of 14%. And when including the dividend, its total returns are up over 15%.
