Vanguard 500 vs Vanguard Total

[rockrock]

Total stock market is the most tax effecient mutual fund by definition because it owns the whole market.

RE: commodities - while there is no positive expected value, I don't think that is true for derivatives which PCRIX uses to trade. Also studies show that adding commodities decreases standard devation (one way to measure risk) in a portfolio while only taking away slighty from expected returns.

commodities also a great hedge against geopolitcal risk, specific event risk, unexptected inflation (i.e. katrina), etc.

MPT is pretty clear on size and value - the more of it you have the more risk you are taking but the higher your expected returns.

[Sniper]

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Total stock market is the most tax effecient mutual fund by definition because it owns the whole market.

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Come on rock, I know you know this isn't true!

There are actually 3757 (as of 1/31) stocks in that fund
It had a turnover rate last year of 12%
Its Cap weighted, so its basically a large cap fund, with the top 10 holding representing 15.7% of asset value.

Vanguard Total Stock Market Holdings

What does tax efficiency have to do with what it owns??

[rockrock]

Sniper it was late when I wrote that and here is what I meant.

VTSMX uses index sampling to mimic the return of the entire market. Since it remains fully invested and securities theoretically don't go in and out of the index (like any other S&P, Barra, MSCI or any other index) the turnover is extremely low - the fund already owns the equities regardless of their market cap, PE, etc.

This is what I meant by stating it owns the "entire market". When a small cap becomes a mid cap or big cap or microcap, the fund doesn't have to sell the shares, or acquire the shares. It already owns them.

I was trying to find a list of the cap gains paid by the fund through the years. It pays small dividend, but I stand by my statement that among funds that have been around a while, this the most tax effecient equity based mutual fund in the history of the world (save perhaps the rydex or permabear type funds).

[MatthewRyan]

The answer depends on your overall asset allocation. If this is to be the only domestic equity fund then you need to pick TSM. However, if this fund is meant to represent your large cap exposure, than SP500 is better.

SP500 = 100% large caps

TSM = 70% Large, 20 mid, 10 small .... roughly

-Matt

[Sniper]

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TSM = 70% Large, 20 mid, 10 small .... roughly -Matt

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Do you have a source for this, I couldn't find one when I did a quick look... I did note that fund holds less than $1,000 worth of some stocks though.