By Roger Nusbaum:
Friday I had an article published at TheStreet.com that looked at the new iShares suite of ten core ETFs. In the article I came around to a point that I have made here before but is worth mentioning again.
Click to enlarge
(click to enlarge)
The chart compares the iShares Total Stock Market ETF (ITOT), the iShares S&P 500 ETF (IVV) and the iShares Russell 1000 ETF (IWB) since ITOT's inception (the original symbol was ISI). Long story short, iShares suggests a strategy that involves ITOT and IVV (and other funds) to construct a "well diversified" portfolio. I added IWB to further make the point.
The point is the extent to which large cap domestic index funds are going to look very similar even if they track different indexes. There is not going to be any diversification benefit to owning a cap weighted total stock market fund and any sort
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