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Mutual Fund Breakdown

Posted: Sun Jan 25, 2015 10:10 pm
by climbhigh
Hello All -

Trying to better understand the funds I'm invested in, specifically the total stock market fund. Someone posted on here last week that the total market fund was equivalent to 3-parts (or was it 4-parts?) S&P 500 plus 1-part extended market. Is there anything concrete to back that up, say from Vanguard themselves? Sorry I can't find the post he made and have tried searching it. Is there a similar "conversion" for other funds, such as the total international fund or total bond fund?

Thanks!

Re: Mutual Fund Breakdown

Posted: Sun Jan 25, 2015 10:18 pm
by 123
The prospectus for the funds, always available online these days, will give you a good idea of the contents of a mutual fund. If the mutual fund is a "fund of funds" it will identify the component funds and the percentages of each. If it is not a "fund of funds" it will disclose the breakdown of the market capitalization breakdown of the fund and the investment style (if any).

Re: Mutual Fund Breakdown

Posted: Sun Jan 25, 2015 10:31 pm
by lack_ey
Functionally, the extended market (market completion, i.e. everything else) index is supposed to be everything in the total market index that is not in the S&P 500.

See here:
http://www.rimes.com/sp-total-market-an ... on-indices

The index providers have slight differences in their total market indexes, so someone else's total market index—or a total market index fund based on that index—could be insubstantially different from the S&P 500 + the S&P extended market indexes put together, in the sense that some very small companies may or may not be included at the fringes. That's because the "total market" doesn't quite mean the total market literally.

The market cap of the S&P 500 vs. everything else is roughly 4 to 1. It's constantly changing. For whatever reason I'm not finding updated numbers as of the last year or so with a quick search, but whether the S&P 500 is 76% or 81% the whole thing isn't all that important either.

In other words, S&P 500 and extended market form more or less a partitioning of the total market index. In a similar sense you might say a developed ex-US international market index could be partitioned into developed Asia, developed Europe, and Canada. Or total international (ex-US) into developed and emerging, where "total international" actually doesn't quite mean "total" because it's missing frontier markets.

Just take a look at what everything owns. Nothing special is really going on here, just different ways at owning different slices of the same thing, except that certain slices put together may or may not have overlaps or may or may not fit together into 100% of the whole.

Re: Mutual Fund Breakdown

Posted: Sun Jan 25, 2015 10:32 pm
by JamesSFO
climbhigh wrote:Hello All -

Trying to better understand the funds I'm invested in, specifically the total stock market fund. Someone posted on here last week that the total market fund was equivalent to 3-parts (or was it 4-parts?) S&P 500 plus 1-part extended market. Is there anything concrete to back that up, say from Vanguard themselves? Sorry I can't find the post he made and have tried searching it. Is there a similar "conversion" for other funds, such as the total international fund or total bond fund?

Thanks!
Wiki page discusses this, if you are using S&P500 + extended market: https://www.bogleheads.org/wiki/Extende ... index_fund

Also another wiki page: https://www.bogleheads.org/wiki/Approxi ... ock_market