Is Vanguard US Total Market Shares Index ETF (ASX: VTS) a great long-term investment right now with everything going on with the coronavirus?
An introduction to Vanguard US Total Market Shares Index ETF
It's an exchange-traded fund (ETF) that invests in the US share market. Some ETFs give you exposure to hundreds of shares in a single investment. This ETF actually holds over 3,500 positions.
What is the management fees?
Any ETF based on an index should be partly judged by its management fee. Following an index should mean lower and lower costs as the ETF gets larger.
Vanguard, a world leader in providing low-cost funds, provides the Vanguard US Total Market Shares Index ETF for an annual management fee of just 0.03% per annum.
Lower fees are important so that more of the returns are left in the hands of the investor. Vanguard shares its profit with its owners, which are the investors themselves. It shares the profit by lowering fees when it can.
What shares does the ETF own?
I'm sure you know many of the ETF's larger positions like Microsoft, Apple, Amazon, Alphabet, Facebook, Berkshire Hathaway, Johnson & Johnson, Visa, Proctor & Gamble and JPMorgan Chase.
There are plenty of other good businesses within its holdings like Mastercard, McDonalds, Home Depot and so on.
By the time you get to the 3000th position of Vanguard US Total Market Shares Index ETF, the investment size isn't very big at all but it provides great diversification. Much better than the ASX in my opinion.
Not only are the industries more diverse, but the earnings come from across the world whereas the ASX is more focused on Australia, New Zealand and perhaps China.
Is the Vanguard US Total Market Shares Index ETF a good buy today?
I think Vanguard U.S. Total Market Shares Index ETF is a solid option for a regular investment plan, whether share prices are higher or lower.
The coronavirus has caused share prices to fall across the world, so it's a much better time to buy shares than it was a few months ago. However, the Australian dollar has weakened compared to the US dollar from the start of the year. So Aussies can't buy as much American shares as they used to.
I wouldn't mind doing a purchase today as it's down 14% from the February high. But I think there could be more price weakness in the coming months.
