The Mutual Fund That Ate Wall Street -- Based on an Index Few People Know About

Mark

This is a WSJ report which may require a subscription to read.

"Everyone knows the New York Stock Exchange. And its rival, Nasdaq.

But there is a mutual fund that invests in stocks based on a relatively unknown market index that has grown so large it might be considered a third stock market unto itself.

That fund is the $1.3 trillion (yes, trillion, including all share classes) Vanguard Total Stock Market Index Fund (VTSAX) and its exchange-traded-fund shares. The fund, from Vanguard Group, now accounts for 10% of all assets in U.S. stock mutual funds and ETFs in the market, according to Morningstar Inc. No other mutual fund or ETF comes close to it in asset size. The next largest is an $821 billion Vanguard S&P 500 index fund.

The paradox is that this biggest beast among funds is tied to the most unassuming of stock indexes—the CRSP U.S. Total Market Index, developed at the University of Chicago’s Booth School of Business."

Journal Report

yogibearbull

Yep, that happened in 2012 when Vanguard had a fee dispute with MSCI and moved about 2 dozen indexes from MSCI to CRSP and FTSE.
As for VG Total Stock Market Index (VTSAX/ VITSX/ VTI), it also has a smaller but separate cousin VG Institutional Total Stock Market Index (VITNX, no ETF class) that confusingly has significant annual CG distributions.
https://www.morningstar.com/articles/569258/vanguard-to-switch-benchmarks-for-22-index-funds

Mark

@YBB - might that cousin (VITNX) be actively managed?

yogibearbull

@mark, no, it is a total stock market INDEX but with humongous min for retirement plans. So, when they leave (with millions), it causes realized CGs.
I will edit my previous post by inserting "Index" in the names.