This Fan-Favorite Vanguard ETF Doesn't Tell the Whole Truth

Many investors mistakenly believe that in order to build a diversified portfolio using exchange-traded funds, you have to own a large number of different ETFs. It's true that with individual stocks, owning shares of at least a couple dozen different companies is useful in preventing a potentially catastrophic loss in your portfolio if something bad happens to one of your stocks. With ETFs, though, there's a level of diversification that's already built in, because the fund itself owns many different individual stocks that often move in different directions depending on market conditions. As a result, you might be able to get all the exposure that you need from a handful of ETFs.Indeed, the Vanguard Total Stock Market ETF (NYSEMKT: VTI) aims to take the diversifying value of ETFs a step further. Its name suggests that if you need stock exposure, you need look no further than this fund. When you look more closely, though, you'll realize that this "total market" fund actually leaves out a huge portion of the stock market. In this third and final article on Vanguard Total Stock Market ETF for the Voyager Portfolio, you'll find out why the fund's name is a bit of a misnomer and why you might consider supplementing what seems to be an all-inclusive ETF with a different type of fund.Image source: Getty Images.Continue readingWeiter zum vollständigen Artikel bei MotleyFool Weiter zum vollständigen Artikel bei MotleyFool