Vanguard US Total Market Shares Index ETF tumbles following Wall Street sell-off

This Vanguard ETF is feeling the pain today. Here’s why…

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Concept image of US dollar in front of a graphic showing shares and a downward arrow representing the VTS ETF

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ASX shares are taking a rather nasty tumble today, erasing the gains from earlier in the week. At the time of writing, the S&P/ASX 200 Index (ASX: XJO) has lost 1.6% and is well back below 7,100 points.

This comes after some horror moves on US markets overnight (our time). The US flagship Dow Jones Industrial Average (INDEXDJX: .DJI) fell a nasty 3.57% last night. But it was the tech-heavy NASDAQ-100 (INDEXNASDAQ: NDX) that really copped it. The NASDAQ fell a whopping 5.06% and back below 12,000 points.

This has led to some equally depressing moves today for exchange-traded funds (ETFs) that cover the US markets directly. Take the Vanguard US Total Market Share Index ETF (ASX: VTS). VTS units are down by a hefty 3.34% at the time of writing to $280.15. That’s getting pretty close to the 52-week low of $272.83.

Vanguard US Total Market Shares Index ETF cops a belting

The VTS ETF is a rather special one on the ASX markets. It’s the only ASX ETF out there that tracks the CRSP US Total Market Index. This index consists of more than 4,100 individual companies that are all listed on the US markets. It’s far larger in scope than the popular iShares S&P 500 ETF (ASX: IVV), which only tracks the largest 500 shares in the US. The VTS ETF also has the distinction of being among the cheapest ETFs on the ASX. It only charges a management fee of 0.03% per annum.

Even though the Vanguard US Total Market Shares Index ETF has more than 4,000 underlying shares, it is heavily weighted to America’s largest tech companies. Its top 10 holdings have a collective portfolio weighting of more than 25%. And this is dominated by the likes of Apple Inc (NASDAQ: AAPL), Microsoft Corporation (NASDAQ: MSFT), Alphabet Inc (NASDAQ: GOOG) (NASDAQ: GOOGL), and Amazon.com Inc (NASDAQ: AMZN).

Last night, Apple shares fell by more than 5%. Microsoft dropped 4.55%, while Alphabet’s shares ticked down 3.7%. But Amazon’s 7.16% plunge takes the cake.

No wonder VTS ETF units are getting punished today.

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Motley Fool contributor Sebastian Bowen has positions in Alphabet (A shares), Amazon, Apple, and Microsoft. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Alphabet (A shares), Alphabet (C shares), Amazon, Apple, and Microsoft. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has recommended the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. The Motley Fool Australia has recommended Alphabet (A shares), Alphabet (C shares), Amazon, Apple, and iShares Trust - iShares Core S&P 500 ETF. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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