5-Star ETFs Poised to Pop: Vanguard Total World Stock


Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, the Vanguard Total World Stock Index ETF (ASE: VT) has earned a coveted five-star ranking.

With that in mind, let's take a closer look at Vanguard Total World Stock and see what CAPS investors are saying about the ETF right now.

Vanguard Total World Stock facts


June 2008

Total Assets

$960 million

Investment Approach

Seeks to track the performance of the FTSE All-World Index, which covers both well-established and still-developing markets.

Expense Ratio


3-Month / 1-Year / 3-Year Return

(2%) / (2.4%) / 14.4%

Top Holdings with High CAPS Rating (4 or 5 Stars) and Portfolio Weight

ExxonMobil (NYS: XOM) (1.4%)

IBM (NYS: IBM) (0.8%)

General Electric (NYS: GE) (0.6%)

Dividend Yield



iShares MSCI ACWI Index (NAS: ACWI)

iShares S&P Global 100 Index (ASE: IOO)

Sources: Morningstar and Motley Fool CAPS.

On CAPS, 94% of the 32 members who have rated Vanguard Total World Stock believe the ETF will outperform the S&P 500 going forward. These bulls include brfishe and All-Star AccountantMike, who is ranked in the top 5% of our community.

Last year, brfishe succinctly summed up the opportunity and a potential shortcoming: "[G]reat etf with low expenses and significant exposure to international markets; only concern is that there is limited small cap exposure with this etf."

In fact, Vanguard Total World Stock sports an expense ratio of 0.25%. That's lower than that of other broad global ETFs like iShares MSCI ACWI (0.35%) and iShares S&P Global 100 (0.40%).

CAPS All-Star AccountantMike elaborates on the bull case:

[Vanguard Total World Stock] provides one stop shopping for near perfect diversification.

I will never cease to be baffled and annoyed by the division of the equity investing world into the categories of "American" stocks and "rest of the world" stocks. Even more enraging is the multitude of "global" or "ex-US" exchange-traded funds which exclude major markets such as Canada, South Korea and Latin America, or have no exposure to emerging markets at all.

[Vanguard Total World Stock] includes both "American" and "rest of the world" stocks. The "rest of the world" includes Canada, South Korea, Latin America and covers both developed and emerging markets. The emerging markets portion goes beyond just the BRICs. The expense ratio is low and getting lower. The only real weakness here is a lack of small cap exposure.

For long term, buy and hold investors, this could be only investment you ever need to make.

What do you think about Vanguard Total World Stock, or any other ETF for that matter? If you want to retire rich, you need to put together the best portfolio you can. Owning exceptional ETFs is a surefire way to secure your financial future, and on Motley Fool CAPS, thousands of investors are working every day to find them. CAPS is 100% free, so get started!

Interested in another easy way to track Vanguard Total World Stock?Add it to your watchlist.

At the time thisarticle was published Fool contributorBrian Pacamparaowns no position in any of the companies mentioned. The Fool owns shares of IBM. Try any of our Foolish newsletter servicesfree for 30 days.We Fools may not all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. The Fool'sdisclosure policyalways gets a perfect score.

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