2026’s major rotation away from U.S. tech and toward other stock market sectors should provide a good lesson for investors. Sometimes, it pays to own the whole market instead of trying to pick winners and losers. Sure, you’ll end up owning some underperformers, but you’ll also own the leaders. That makes the entire ride smoother and helps you capture the whole U.S. economic growth story.
Three of the best total U.S. stock market exchange-traded funds (ETFs) share two important traits — they’re ultra-cheap (each has an expense ratio of just 0.03%) and they’re incredibly diversified. That makes them perfect to buy and hold forever.
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The Vanguard Total Stock Market ETF (NYSEMKT: VTI) is the most diversified of these three ETFs, at least based on the number of securities held. It holds roughly 3,500 individual stocks, comprising nearly the entirety of the investable U.S. stock market.
The 1,000 or so companies that this fund owns that the next two don’t are very small micro-cap stocks. That means that even though there are more companies being held, the difference is negligible to overall performance. This portfolio is market cap-weighted, so we’re talking tiny allocations.
The iShares Core S&P Total U.S. Stock Market ETF (NYSEMKT: ITOT) takes a similar approach, but holds a comparatively smaller 2,500 stocks. In terms of overall sector and individual weightings, it’s virtually the same as the Vanguard Total Stock Market ETF.
The Schwab U.S. Broad Market ETF (NYSEMKT: SCHB) is more similar to the iShares Core S&P Total U.S. Stock Market ETF than the Vanguard ETF. It also targets around 2,500 stocks and omits a lot of the micro-caps that iShares ETF also does.
In terms of performance and behavior, the three ETFs will be almost identical. The differences between them are minor enough that you probably wouldn’t even notice them unless you knew they were there.
The most important characteristics of these funds are common to all three. The razor-thin expense ratios mean they cost next to nothing to own. They’re incredibly diversified and own nearly the entire U.S. stock market. They’re highly liquid and highly tradable, which means you also lose next to nothing in terms of trading spreads.
