stanolshefski t1_jac6uu7 wrote on February 28, 2023 at 11:28 AM

Reply to comment by charliekunkel in My Roth IRA is 100% invested into VTSAX. Is it an issue to keep investing in VTSAX each year? by dennisj9

A fair warning with those two fund, the Vanguard Total World Stock Index Fund is basically the equivalent of owning 50% VTSAX and 50% Vanguard Total International Stock Index Fund.

Ok-Construction-7727 t1_jaebjuv wrote on February 28, 2023 at 8:39 PM

VTIAX has some tax benefit too. If you want this control, you'd probably want to do VTSAX/VTIAX.

HereForTheNerves t1_jaebvjn wrote on February 28, 2023 at 8:42 PM

This is a good point: how important is it to ensure that index funds are not overlapping? For instance, is it asinine to fund both VTSAX and VFIAX given that one is a subset of the other?

stanolshefski t1_jaefu2d wrote on February 28, 2023 at 9:07 PM

It's not important per se in these types of highly diversifed funds.

When the funds overlap, you're not changing diversification -- you're changing asset allocations.

I use Vanguard Total Stock Market Index Fund (VTSAX) along with Vanguard Small-Cap Index Fund (VSMAX) to get more mid-cap and small-cap exposure. My investment plan calls for taking more risk (and hopefully returns) by increasing my exposure to mid-cap and small-cap stocks.

However, all of the stocks in VSMAX (1,486 stocks) are in VTSAX (3,969 stocks).