The Vanguard Total Stock Market ETF (VTI +0.74%) might be the most diversified exchange-traded fund (ETF) investors can buy. It's designed to track the performance of the CRSP U.S. Total Market Index, which holds every single stock listed on American exchanges.
That means this Vanguard ETF offers investors exposure to everything from the largest, multi-trillion-dollar tech giants like Nvidia all the way down to the smallest, little-known listed companies with market capitalizations of under $1 billion. Owning a highly diversified ETF can be a double-edged sword. It can reduce risk and deliver steady returns, but it won't perform as well as concentrated ETFs, like those that track the Nasdaq-100 or even the S&P 500.
Here's how the Vanguard Total Stock Market ETF could turn $1,000 per month into $500,000 in less than 20 years.
Image source: Getty Images.
Thousands of stocks, neatly packaged into one ETF
The Vanguard Total Stock Market ETF holds a whopping 3,555 stocks from 11 different sectors of the U.S. economy. The technology sector is the largest component by far with a weighting of 34.5%, primarily because it's home to the three most valuable companies in the world: Nvidia, Microsoft, and Apple, which have a combined market capitalization of $10.7 trillion.
In fact, the majority of the stocks in this Vanguard ETF's top 10 holdings are from the tech and tech-adjacent industries:
|
Stock |
Vanguard ETF Portfolio Weighting |
|---|---|
|
1. Microsoft |
6.01% |
|
2. Nvidia |
5.50% |
|
3. Apple |
5.30% |
|
4. Amazon |
3.43% |
|
5. Alphabet |
3.18% |
|
6. Meta Platforms |
2.49% |
|
7. Broadcom |
1.99% |
|
8. Tesla |
1.66% |
|
9. Berkshire Hathaway Class B |
1.57% |
|
10. JPMorgan Chase |
1.28% |
Data source: Vanguard. Portfolio weightings are accurate as of May 31, 2025, and are subject to change.
The combined 16.8% weighting of Microsoft, Nvidia, and Apple sounds very high considering the ETF holds over 3,500 stocks. But those three names have an even higher representation in the mainstream indexes -- they account for 19.1% of the S&P 500, and a whopping 36.8% of the Nasdaq-100.
In other words, those tech heavyweights have a lesser influence over the performance of this Vanguard ETF, compared to their influence over the S&P 500 and the Nasdaq-100. Since tech stocks like Nvidia typically outperform the rest of the market, a smaller weighting means that the Vanguard ETF sacrifices some potential upside.
But it also makes room for hundreds of smaller companies that investors might not otherwise have considered owning. They include many high-quality Russell 2000 stocks, like:
- Credo Technology, which supplies networking and connectivity solutions for data centers, mobile networks, and more.
- Upstart Holdings, which developed a lending algorithm powered by artificial intelligence to help banks to better assess the creditworthiness of potential borrowers.
- Tenable, which is a leading developer of vulnerability management cybersecurity software for enterprises.
- Sprouts Farmers Market, which owns 410 organic grocery stores across the U.S.
NYSEMKT: VTI
Key Data Points
Turning $1,000 per month into $500,000
The Vanguard Total Stock Market ETF has delivered a compound annual return of 8.9% since it was established in 2001. But it has generated an accelerated average annual return of 12.9% over the last 10 years specifically, mainly thanks to increasing contributions from stocks in the technology sector.
Here's how long it could take to build a $500,000 fortune by investing $1,000 per month in this ETF, based on three different average returns:
|
Compound Annual Return |
Time to Reach $500,000 |
|---|---|
|
8.9% |
17 years and 5 months |
|
10.9% (midpoint) |
15 years and 9 months |
|
12.9% |
14 years and 5 months |
Calculations by author.
If the ETF continues to grow at the same pace it has over the last decade, investors could turn $1,000 per month into $500,000 in slightly less than 15 years. But even if the ETF reverts back to its long-term average return of 8.9%, they could still be sitting on a $500,000 fortune in under two decades.
Because of its broad diversification, I think the Vanguard Total Stock Market ETF is one of the only funds that can truly be considered a complete portfolio, meaning investors wouldn't necessarily have to own anything else. The same can't be said for ETFs that track indexes like the Nasdaq-100 or even the S&P 500, because their performance is so heavily influenced by just a handful of their largest holdings.
Therefore, people who are looking to build long-term wealth through consistent monthly contributions should certainly consider using the Vanguard Total Stock Market ETF.
