You had the best explanation in the difference than any other You Tuber presentation I have watched! I am a VTI investor, and I won't switch because I have over 3 years in investing VTI. To me one is not any better than the other and it's like you say just pick 1 and get started! I just like VTI because I like the exposure to Mid and small cap stocks all in one ETF.
I am so big on stocks and it has worked well for me, but I also like to have a well balanced, low-cost set of ETFs that keeps the money in my pocket. I would love to maintain a similar effective approach on ETFs.
Have you considered the possibility of cashing out some of those dividends for paying off your monthly expenses, instead of re-investing them? Bcos I need a lot as rent, inflation alone eat up almost all of what I make.
tbh I keep compounding, adhering to well established structure from a professional, can bring tremendous value! I’ve trimmed, added also and now my average growth has increased in the past year while participating behind a top performer. I put in 65k few years back, now effectively remits over hundred k and increasing.
Cheers ethelbert Im looking to start a position in SCHD, JEPQ with dividends of existing stocks. It's going into an IRA and I'm really looking for growth over time. I will be reinvesting dividends like you, so my position size will grow. Okay if I get introduced to your viewpoint, I need similar performance on mine.
I don't bother about which etf should I choose. I just stick to what Jack Bogle said, "choose ETF with the lowest cost and broadly diversified stock". Therefore I choose VTI
Sorry but this is just a dumb take. Plenty ways to learn many things and UA-cam is one of them. Every information source needs to be vetted and just because it’s “more traditional” won’t guarantee that it’s better. Where did you learn to manage your money?
@@mattderron Agreed (and thankyou for your content). We sare starting on that semi retirement path and already have been burnt by so-called "well known" and "reputable" advisor who specialises in our situation. $USD6500 down the gurgler for what basically was a travel brochure. I am financially ignorant - really - I find it hard to balance a cheque book - but by continually learning and reading and researching I can satisfy myself that at least I understand a little bit more every day. Plus it gives me soemthing to do! Glad Matt you did this one on overlap - I had discovered ETFRC and it is invaluable. Thanks again
Fund overlap is a new idea to me. I sort of thought about it but the nuanced view you gave in this video is really helpful. I'm in Vanguard now and have all the funds you mentioned. Also the 'overlap finder' tool was a real treasure I knew nothing about. Will be viewing much more of your content.
I've invested in VOO and looked at other ETF's and noticed the overlap and couldn't figure out why I should have those too! I know nothing about investing but that didn't make sense to me so I haven't purchased any more. I think I understand better after this video so I appreciate the info.
@@mattderronAh ok thanks! That’s good to know as your videos genuinely make my day because they’re so high quality and there’s nothing that comes close to it in the finance UA-cam niche.
VGT looks like a good fit for me; I might add a few shares in the near future & hold long-term. I have never bought an ETF before. Usually enjoy picking individual stocks. I’d rather own Brk.b than an S&P 500 ETF; but, that’s mixing bias (for legendary Berkshire investors) with business & I wouldn’t recommend anyone following my path. Perfect video.. thank-you!
Great video once again Matt...I am longtime Vanguard client and I am very active with my Self Directed IRA so this was a great video for me to watch.great insight..I have holdings in the mutual fund VTSAX...and VIGI ETF..thanks..
Don’t know if you’ve done videos on tax loss harvesting or wash sales before, but you’ve got a huge following - that would be an excellent topic, I’m sure some of the newbies are just buying and selling whatever they want without realizing the consequences of how it’s going to effect them come tax time.
I knew a lot of what you covered here, but this is solid info (not fluff like most channels). Earned a subscriber. Will see me commenting occasionally. Appreciate the content!
This is one of the best videos I've seen about this topic as someone interested in ETFs. I literally searched up this exact question about ETF comparisons and this exactly and completely answered my question. Thanks.
This is why diversification is so important, becasue we simply don't know which companies are going to blow up (in stock price and out of production) in 5 or 10 years. Some will undoubtedly but it's better to guarantee a modest growth by investing in different markets and types of assets than to try to guess what's going to happen.
Personally I like having a blend (a base in a broad market index fund and combine that with individual stocks) because that interests me. But definitely agree it's important to have some exposure to the full market
thinking about that exactly, but since I don't have time neither ability to stock pick a realistic next level from "one ETF does it all investor type" would be what you say : a sector ETFs picking type of investor, kind of fund of funds active holder portfolio 🖖
Was thinking the same thing man. Did you ever get into it? I’m honestly thinking VOO, VGT, and BTC , BTC will just be something to mess with, invest my pocket change nothing all that serious.
Matt, this was my first viewing of your Channel. I like your perspectives, especially that of not "automatically" pouring money into the frequently recommended "three-fund" portfolio of popular ETFs. You said this is your money and to carefully consider factors, such as current 5% interest rates and what happened in the past with 5% rates. Great advice. Thanks, Matt.
Awesome video, Matt. I own all 3 and enjoy the growth in the past years. These are the foundations of growing a 6 digit portfolio to a 7 digit portfolio in only a few years. Personally, very hard to go wrong with any of them. I view investment as a marathon - one step at a time and keep buying every two weeks (does not matter if the market is up or down). Please keep posting and thanks again for the great content.
VOO automatically balances the top performing companies through the decades. Historically, the market leaders of every decade change. VOO assures you always have the top 500.
@@nicholasnoriega1205that's correct. VTI holds all US companies in accordance with their size. If you hold VTI and VOO, you are holding the top 500 companies at a larger percentage than the overall stock index.
Thank you. One of the best informational videos I've watched all year. I've been concerned about overlap for sometime and determining the difference between funds. This is extremely helpful.
@journeyman_15 have you found an easy method to quantify the overlap? Meaning having the ability to see how much of your total portfolio is invested in any one stock?
I own VGT precisely because it is overweight AAPL and MSFT. Good explanation. People need to consider the WEIGHTS of each stock and the OVERLAP. Just subscribed.
Thank you for the video and information. I once did own VOO, VYM, VNQ, VTI & SPY I owned them for almost two years, then realized the only real difference between VOO & SPY was there payout dates. Actually, SPY held it's value better and VOO paid better dividends. A medical emergency had me liquidating stocks to raise quick cash without having to barrow any funds. Now I only own VNQ & VYM
I went with VGT and SCHD as the core in my Roth IRA, and SCHD, VGT, QQQM in my taxable acct. Overlap is low to medium, SCHD raises the floor and there's some good growth. My timeframe is about 15 years, maybe 20.
Ty and you for sharing. I’m starting late at 51 yrs young and made a few bad choices but now I’m at a short end of investing at my age but the annual income in Louisiana is hard to meet that mark. From 23,000 annual vs a 63,000 annual. I invest in robinhood only bc I don’t know better or I don’t understand which platform to use. But thank you for clarifying a lot on vanguard. Especially exoense ratio.
Thanks! One option is to do nothing and just contribute to the one you like most going forward. There’s no “issue” with holding both as long as you understand the overlap is there
I totally agree with you, with interest rate this high and not falling ... those mage cap growth stock is going to have a hard time (and VGT, QQQ will also under perform as a result)
I don't know exactly what's going to happen obviously, but I feel like too many people are taking the last 20 years as "this is how markets always are"
Thanks that helps, i am currently doing VTI as a start just because it was cheaper to start with😅.Will definitely do more research especially with the overlapping because that makes alot of sense not to buy funds that are almost the same thing.
I currently hold VOO only, but holding both VTI and VOO is, I think is OK because it forces people to deviate from investing individual stocks. I am not saying we shouldn't invest in the individual stocks, but if buying ETFs and chill out is a person's goal, then it won't matter to hold both in my rookie opinion.
You're right, I thought about that as I was editing the video. They are essentially the same so having both is like having more of one than the other. I think the main point I was trying to get across is if you have both because you think they're different or doing something different for you - then it's good to know that it's not really.
Good analysis. Note: this isn't exclusive with Vanguard. Generally investing in ETFs and mutual funds will have the same overlap just by the nature of the investment offerings. It's up to the individual to be cognizant of their holdings.
Yup absolutely correct, this isn't Vanguard specific - it's something to look at for everyone. I chose Vanguard to highlight this issue because they are some of the most popular and well known ETFs out there - especially VTI and VOO.
Overlap in itself is not bad, for example if you have VOO and VGT because you really think tech companies like MSFT, AAPL, and NVDA will do well and you want a higher weight on those companies...that's perfectly fine. The main point of the video was to show why it's important that we know what we're actually invested in. Overlap is fine as long as it's what you expect and you know it's there. Hopefully that makes sense.
I really enjoyed the information you presented in this video. I am new to the market. Thank you!!!! You have yourself a new Subscriber!!!! Woot Woot!!!!
got a 4 fund: VOO, VDC, SCHD, DGRO. SCHD and DGRO are a combo dividend play. VDC invests in all consumer goods. Most of allocation goes into VOO. These are all in my personal account. Maxing a Roth out with a 4 mutual fund allocation (Dave Ramsey blend). Lets see how it all plays out in 30 years.
VGT/SCHD is all you will ever need!! I currently own 5k shares of schd and 500 shares of vgt! Drop the mic!!! All done!!! No need to add or subtract! Game over!
@@dt6750 it takes time, focus and dedication! You'll get there! Don't forget to buy at least 1 income property for taxes and cash flow! Ideally you want 4 but 1 is plenty! I have 6..
@@malikbeluga7545 absolutely not! If anything I might get another 1k if it goes to $65 bucks and another 2k if it goes to $60 bucks I'm all in when it comes to SCHD!
Thank you, that means a lot! I'll obviously be keeping people updated in my normal videos, but if you're interested in knowing when things happen consider signing up for the newsletter on the website. That's where I'm talking about stuff and provide updates every week. Thanks again!
My core is QQQM & VGT. I really believe that tech is and will continue to be the driving force in the market for the rest of my life. I have a 20+ year horizon so market fluctuations don’t worry me too much.
You probably know this but if you’re looking at a pure play in tech, you’re better off going with just VGT. QQQ/QQQM aren’t strictly speaking pure tech. There’s others strictly focused on tech but VGT is probably at the top.
Thanks, I'm not familiar with how VONG selects growth out of the Russell 1000 index, so I'd have to look into it to have any kind of intelligent opinion on it
@mattderron - I just got stock and signed up with a broker. Can you tell me how to create a portfolio; and where I can get instructions how to add my stock to my broker's chart. I'm not sure if I'm using the right terms but if you understand what I'm trying to say, I really appreciate it, or are there UA-cam videos that will help? Thank you.
Thanks for this video. Just now making big pay checks and wanting to invest. Thanks for pointing out specific examples and especially the last section on why this should matter. Those parts helped the most.
Great video! I admittedly clicked for the title, but the video is much more. At the start, investing is very confusing, but this broke a lot of things down in a way that I wish I was aware of on the outset. This is a good introduction to investing, keep it up.
Great content! Thank you for this. I've been investing in both VTI and VOO thinking that this gave me a good mix of large to small cap exposure and not realizing the extent of the overlap. What ETFs should I be looking at for small and mid cap exposure to complement VOO?
Thanks for the video! I sold out of a couple laggard large cap mutual funds in the last few months and looking to redeploy that money in lower cost ETF’s, virtually every etf I look at…the exact same top 5 holdings. Apple, Microsoft, Nvidia, Google, Amazon, it’s impossible to escape. Vanguard actually had a couple lesser known ETF’s I found but they trade 7k shares a day and the bid/ask spreads are crazy.
As a non-US person and not living in the US, I have very limited option to invest in the US market. Because I live in Asia. Correct me if I am wrong. Yes of course I can invest in the US stock market, but the big issue is that I am limited to investing upto USD60K, without triggering the Estate Duty, when a person passes on. Where I live, there is no double-tax treaty. Your video is really a MAJOR eye-opener, something my Relationship Manager cannot or did not explain the differences or overlaps between these three ETF. Now I would have loved to do the VOO in addition to VTI, maybe I might rebalance my portfolio. Now about that tax thing.....hmmmm.
@Matt Derron - If I have my money in Fidelity, does it just make sense to buy Fidelity’s index funds instead of Vanguard’s? For example, if I want to buy VOO should I just buy FXAIX and pay less expense ratio? That is what I am having trouble with. Convenience is telling me Fidelity but I want to make sure I’m not missing out on something Vanguard provides in VOO that Fidelity doesn’t in FXAIX. Thanks!
The only difference is that VOO is an ETF and FXAIX is a fund - it just means that with ETFs you can buy and sell throughout the day like a stock. Funds only trade at the end of day price. Other than that they are close to identical and absolutely nothing wrong with Fidelity’s offering. I have my money with Schwab and usually look for Schwab equivalent funds whenever I do
I'm keen on diversification by way of categories rather than just random diverse stocks which may, and as you rightly point out, carry massive overlap.
I really appreciate your explanation. I am new to investing, when I went to Vanguard I was overwhelmed for the amount of product you can pick but I didn’t understand. Thank you for contributing greatly to my knowledge.
VGT is up too much for me in the past 10 years for me to invest into it. In the 10 years before that they ran each other pretty much even. I’m 100% into VTI and 100% in VFTNX in my 401k.
I hold VTI and am gradually adding VXUS for International exposure. The whole point of buying VTI is that I am exposed to everything by weight. If I wanted to bet that the big companies would perform better on average, I'd have bought the S&P 500 instead of VTI. I didn't want to bet that any one set of companies would outperform expectations so I bought the whole thing by weight.
Thanks for the video. I’m new to investing and I realized that I have 4 overlapping ETF’s, so I got rid of 2 and left with 2. After watching this video, I realized again that I am still overlapping with my remaining 2: VOO and VTI. I think will keep VOO and get rid of VTI since I have VTSAX in my other brokerage account; they are essentially the same thing except one is an ETF and other is an Index Fund. D’oh! I don’t know what I’m doing. 😅
No worries. Just to be clear - overlap itself isn’t always bad as long as you’re aware of it and it’s what you intend to do. For example - if you have VOO but you want higher allocation to tech and so you buy VGT - that’s ok. The main point is just to know what you’re invested in so you can make the best decisions for yourself. Hope that helps
I actually think the mid/small cap exposure can be good, but could we dial in the allocations better probably with some combo of VOO, VO, and VB? Probably
Hey Matt, I was hoping to get your thoughts on this. Below are my "work in progress" portfolios. I'm not happy with these as I think them to be too growth-heavy with overlap: 1. { VUG, SCHD, FTEC, BRK.B, SOXQ, QQQM } for Roth 2. { IVV, SCHD, FTEC, SCHG, SOXQ, QQQM } for Taxable non-retirement Backtrack testing on PortfolioAnalyzer has shown around 18% over 10 years for both. Had to replace some ETFs with ones with longer track record Example, FTEC with VGT
Hi - just FYI it's really impossible for me to know if any type of portfolio is good for you because it depends on all of our own individual situations, risk tolerance, and investment goals. In general the question I would ask is - do you know why you've added each one of those ETFs to your portfolio and what you hope they will contribute to your portfolio? For example you have both VUG and QQQM in portfolio 1. Obviously they are both different funds with different criteria - but both growth focused. Is there something you expect differently from one or the other? Is there something in QQQM that you want that's not in VUG? Also - you have FTEC and SOXQ in the fund. FTEC is an information technology fund, SOXQ is a semiconductor fund - I'm guessing there is overlap in those since a lot of the semiconductor companies are in the IT sector? Is there a reason you have both there? Lastly - it's good to look at historical performance to get an idea of how something has performed, but it's not a guarantee that it will continue to perform that way. So if you really believe in the semiconductor sector because of AI, then cool invest in that. Or if you really mostly believe in NVIDIA long term as it relates to AI, then invest in a fund that has it, etc. It's more about combining stocks and ETFs that complement each other as opposed to finding all of the ones that performed best before. Hope this helps.
@@mattderron Thanks Matt, much appreciated. You've given me a few things to ponder. Initial goal was to maximize returns. Portfolios were created using R code with that sole objective in mind analyzing just historical returns. I'm trying to add relevant variables with each iteration to improve ETF selection. Thanks for the feedback & Happy New Year!🙂
If an investor has Fidelity (taxable, non-retirement account) and would like to invest in Vanguard's VOO, can he or she do that? What are the pros and cons?
You had the best explanation in the difference than any other You Tuber presentation I have watched! I am a VTI investor, and I won't switch because I have over 3 years in investing VTI. To me one is not any better than the other and it's like you say just pick 1 and get started! I just like VTI because I like the exposure to Mid and small cap stocks all in one ETF.
Thanks I appreciate it!
I reinvest my ETFs dividends 100% and will do so for years growth.
I am so big on stocks and it has worked well for me, but I also like to have a well balanced, low-cost set of ETFs that keeps the money in my pocket. I would love to maintain a similar effective approach on ETFs.
Have you considered the possibility of cashing out some of those dividends for paying off your monthly expenses, instead of re-investing them? Bcos I need a lot as rent, inflation alone eat up almost all of what I make.
tbh I keep compounding, adhering to well established structure from a professional, can bring tremendous value! I’ve trimmed, added also and now my average growth has increased in the past year while participating behind a top performer. I put in 65k few years back, now effectively remits over hundred k and increasing.
Melii a lot of people let their dividends ride for the long-term given its solid returns effects overtime
Cheers ethelbert Im looking to start a position in SCHD, JEPQ with dividends of existing stocks. It's going into an IRA and I'm really looking for growth over time. I will be reinvesting dividends like you, so my position size will grow. Okay if I get introduced to your viewpoint, I need similar performance on mine.
I don't bother about which etf should I choose. I just stick to what Jack Bogle said, "choose ETF with the lowest cost and broadly diversified stock". Therefore I choose VTI
VT is more broadly diversified.
I’m glad you are talking about fund overlap. This is the second channel I have found that mentioned it. It doesn’t seem to get discussed often.
That's what I'm worried about if I invest in VTI since I already own 358 shares of fxaix 🤔
Doesnt matter. I can only buy VOO and VTI for the rest of my life and I would probably still beat 99% of any portfolio managers 😂
If you need a youtube channel to explain investment basics to you then you already failed at managing your money.
Sorry but this is just a dumb take. Plenty ways to learn many things and UA-cam is one of them. Every information source needs to be vetted and just because it’s “more traditional” won’t guarantee that it’s better. Where did you learn to manage your money?
@@mattderron Agreed (and thankyou for your content). We sare starting on that semi retirement path and already have been burnt by so-called "well known" and "reputable" advisor who specialises in our situation. $USD6500 down the gurgler for what basically was a travel brochure.
I am financially ignorant - really - I find it hard to balance a cheque book - but by continually learning and reading and researching I can satisfy myself that at least I understand a little bit more every day.
Plus it gives me soemthing to do!
Glad Matt you did this one on overlap - I had discovered ETFRC and it is invaluable.
Thanks again
The interest rate chart you put up was very telling. Great video breaking down holdings within these ETFs!
Thanks!
Fund overlap is a new idea to me. I sort of thought about it but the nuanced view you gave in this video is really helpful. I'm in Vanguard now and have all the funds you mentioned. Also the 'overlap finder' tool was a real treasure I knew nothing about. Will be viewing much more of your content.
Thanks, glad it was helpful
I've invested in VOO and looked at other ETF's and noticed the overlap and couldn't figure out why I should have those too! I know nothing about investing but that didn't make sense to me so I haven't purchased any more. I think I understand better after this video so I appreciate the info.
You’re the only UA-camr who’s channel I check everyday for a new video.
Thanks, much appreciated! Just FYI I try to post Mon / Wed / Fri, but have only been posting Mon / Wed lately
@@mattderronAh ok thanks! That’s good to know as your videos genuinely make my day because they’re so high quality and there’s nothing that comes close to it in the finance UA-cam niche.
That’s amazing, thank you for your kind words. Means a lot!
VGT looks like a good fit for me; I might add a few shares in the near future & hold long-term.
I have never bought an ETF before. Usually enjoy picking individual stocks.
I’d rather own Brk.b than an S&P 500 ETF; but, that’s mixing bias (for legendary Berkshire investors) with business & I wouldn’t recommend anyone following my path.
Perfect video.. thank-you!
ETFs work great at what they're designed to do, and they make it easy for a lot of folks to get invested and do well
Great video once again Matt...I am longtime Vanguard client and I am very active with my Self Directed IRA so this was a great video for me to watch.great insight..I have holdings in the mutual fund VTSAX...and VIGI ETF..thanks..
Thank you!
Thanks for the video. I appreciate that your approach is reasonable, humble, and logical.
Thank you!
Love your content brother! You introduced me to that etf overlap website and now I am addicted to it! Great tool!
Thank you! It’s an awesome website, very helpful!
Went with VTI 2 years ago and it has worked great for me. Going to stick with it until I retire.
That’s awesome!
Very down-to-earth and understandable. Thx for the clear explanation.
Don’t know if you’ve done videos on tax loss harvesting or wash sales before, but you’ve got a huge following - that would be an excellent topic, I’m sure some of the newbies are just buying and selling whatever they want without realizing the consequences of how it’s going to effect them come tax time.
I haven't done a video on that. It definitely is good to know, will put it on the list for the future
I knew a lot of what you covered here, but this is solid info (not fluff like most channels). Earned a subscriber. Will see me commenting occasionally. Appreciate the content!
Awesome, thanks!
This is one of the best videos I've seen about this topic as someone interested in ETFs. I literally searched up this exact question about ETF comparisons and this exactly and completely answered my question. Thanks.
Thanks, no worries!
This is why diversification is so important, becasue we simply don't know which companies are going to blow up (in stock price and out of production) in 5 or 10 years. Some will undoubtedly but it's better to guarantee a modest growth by investing in different markets and types of assets than to try to guess what's going to happen.
Personally I like having a blend (a base in a broad market index fund and combine that with individual stocks) because that interests me. But definitely agree it's important to have some exposure to the full market
thinking about that exactly, but since I don't have time neither ability to stock pick a realistic next level from "one ETF does it all investor type" would be what you say : a sector ETFs picking type of investor, kind of fund of funds active holder portfolio 🖖
This is what Im doing. Im so glad to read that you like doing this too. Thank you @@mattderron
Look up what Warren Buffet said about diversification.
He also said something to the effect of fund overlap will keep you poor
Ye this is why I personally went with VTI but nothing wrong with S&P 500.
Reality is both are probably gonna do real well lol.
As I am a novice investor, I found this video very helpful.
Thank you, sir.
You’re welcome! Glad it was helpful
I’m almost
All in for VGT plus VOO: that’s all you need!
With AI VGT will go down, because of the large layoffs that are coming...
@barneycasting8331 but it has NVDA in it??
@@barneycasting8331 layoffs are helping
Was thinking the same thing man. Did you ever get into it? I’m honestly thinking VOO, VGT, and BTC , BTC will just be something to mess with, invest my pocket change nothing all that serious.
Matt, this was my first viewing of your Channel. I like your perspectives, especially that of not "automatically" pouring money into the frequently recommended "three-fund" portfolio of popular ETFs. You said this is your money and to carefully consider factors, such as current 5% interest rates and what happened in the past with 5% rates. Great advice. Thanks, Matt.
Awesome, thank you!
Thank you, algorithm, for bringing me to this channel. Just subscribed and time to binge watch. Nice work 👍
Awesome video, Matt. I own all 3 and enjoy the growth in the past years. These are the foundations of growing a 6 digit portfolio to a 7 digit portfolio in only a few years. Personally, very hard to go wrong with any of them. I view investment as a marathon - one step at a time and keep buying every two weeks (does not matter if the market is up or down). Please keep posting and thanks again for the great content.
Thank you, I appreciate it!
Whats the downside of fund overlap?
@@fmxmyway , there is nothing per se; you are just not as diversified. You own the same stocks just in multiple places with different weighting.
SCHD go clobbered with the rapid rise in FED interest rates. I did not see this coming. Bonds were paying up to 5 %.
This channel is the NVIDIA of UA-cam finance content creators. Outstanding growth and bright future. Well done Matt.
Much appreciated, thank you!
VOO automatically balances the top performing companies through the decades. Historically, the market leaders of every decade change. VOO assures you always have the top 500.
100%
Doesn’t VTI basically do the same thing only the whole stock market?
@@nicholasnoriega1205did you get a answer on this?
Exactly. The whole point of weight based balance is that if Apple drops in valuation then their % in the top 500 will drop as well.
@@nicholasnoriega1205that's correct. VTI holds all US companies in accordance with their size. If you hold VTI and VOO, you are holding the top 500 companies at a larger percentage than the overall stock index.
Thank you. One of the best informational videos I've watched all year. I've been concerned about overlap for sometime and determining the difference between funds. This is extremely helpful.
Fund overlap is a real concern. i do watch out for it a lot and make the necessary adjustments for my portfolio
@journeyman_15 have you found an easy method to quantify the overlap? Meaning having the ability to see how much of your total portfolio is invested in any one stock?
I own VGT precisely because it is overweight AAPL and MSFT. Good explanation. People need to consider the WEIGHTS of each stock and the OVERLAP. Just subscribed.
Awesome that's great! To your point, the overlap and being overweighted in some stocks is perfectly fine...as long as you know that you're doing it!
Thank you for the video and information.
I once did own VOO, VYM, VNQ, VTI & SPY
I owned them for almost two years, then realized the only real difference between VOO & SPY was there payout dates. Actually, SPY held it's value better and VOO paid better dividends.
A medical emergency had me liquidating stocks to raise quick cash without having to barrow any funds.
Now I only own VNQ & VYM
I went with VGT and SCHD as the core in my Roth IRA, and SCHD, VGT, QQQM in my taxable acct. Overlap is low to medium, SCHD raises the floor and there's some good growth. My timeframe is about 15 years, maybe 20.
Sounds like a great plan!
Ty and you for sharing. I’m starting late at 51 yrs young and made a few bad choices but now I’m at a short end of investing at my age but the annual income in Louisiana is hard to meet that mark. From 23,000 annual vs a 63,000 annual. I invest in robinhood only bc I don’t know better or I don’t understand which platform to use. But thank you for clarifying a lot on vanguard. Especially exoense ratio.
No worries, we've all made bad choices in the beginning don't worry about it!
We do VUG and VOOG and they are great, but similiar issue. VUG has a lot of apple. Voog, does not.
Great video What would be the best 5 etfs for a beginner with a lump sum ready to invest ?
Vti always wins
I have 240k in voo and 367k in fxaix. 410k in Nvidia
@csick11 sure you do and i have 1 million bitcoins
@@paquesepas6696 nice. Congrats. I don't do crypto. Tried it during 2021 and lost 30k in doge
Great explanation, thank you.... Need to figure out what to do with my VTI since i already have VOO
Thanks! One option is to do nothing and just contribute to the one you like most going forward. There’s no “issue” with holding both as long as you understand the overlap is there
I do VTI and VXUS (an etf that invests in companies outside the USA)
I totally agree with you, with interest rate this high and not falling ... those mage cap growth stock is going to have a hard time (and VGT, QQQ will also under perform as a result)
I don't know exactly what's going to happen obviously, but I feel like too many people are taking the last 20 years as "this is how markets always are"
@@mattderronYes, and that's called recency bias
Thanks that helps, i am currently doing VTI as a start just because it was cheaper to start with😅.Will definitely do more research especially with the overlapping because that makes alot of sense not to buy funds that are almost the same thing.
Fantastic video! Loved it, subscribed
Thank you!
I currently hold VOO only, but holding both VTI and VOO is, I think is OK because it forces people to deviate from investing individual stocks. I am not saying we shouldn't invest in the individual stocks, but if buying ETFs and chill out is a person's goal, then it won't matter to hold both in my rookie opinion.
You're right, I thought about that as I was editing the video. They are essentially the same so having both is like having more of one than the other. I think the main point I was trying to get across is if you have both because you think they're different or doing something different for you - then it's good to know that it's not really.
@@mattderron Yes, I agree. You made a good point.
Great insights! I wasn’t as aware of these overlaps so great to know! Thank you!
No worries, glad it helped!
VOO and VTI like best friends in my portfolio
Isn't voo like 99.99 percent inside VTI already ?
@@lags34 I think I watched a video the other week that said 80% or so but you are correct they are nearly identical....
This is super useful Matt, thank you so much. I was about to do research on the ETFs before investing. And I'm from Singapore :)
Awesome, glad it helped!
Thanks Matt! Appreciate the candid breakdown and pitfalls to look out for. Found ETFRC through your video, so again, glad I clicked to watch it!
Awesome, thanks!
Yes I am concerned about fund overlap. What else other than VGT?
Amazing information, overlap is something that many people don't pay attention.
Thanks!
Good analysis. Note: this isn't exclusive with Vanguard. Generally investing in ETFs and mutual funds will have the same overlap just by the nature of the investment offerings. It's up to the individual to be cognizant of their holdings.
Yup absolutely correct, this isn't Vanguard specific - it's something to look at for everyone. I chose Vanguard to highlight this issue because they are some of the most popular and well known ETFs out there - especially VTI and VOO.
Top quality info. Subscribed! Thanks for sharing!
Thanks, glad it was helpful!
Great info Sir. Thank you.
What are "acceptable" overalap and expense index?
No worries, glad it was helpful!
Overlap in itself is not bad, for example if you have VOO and VGT because you really think tech companies like MSFT, AAPL, and NVDA will do well and you want a higher weight on those companies...that's perfectly fine. The main point of the video was to show why it's important that we know what we're actually invested in. Overlap is fine as long as it's what you expect and you know it's there. Hopefully that makes sense.
@@mattderron It does.. Thank you.
Thank you for explaining this in a clear, kind, and concise way.
No worries, glad it’s helpful!
Great video thanks
No worries!
this is great info.. never thought about this in any detail.. thx
No worries, glad it's helpful!
Great content! 👍 Lots of learning. 📚
Thank you so much Andy and yuki! These are fantastic learning devices and they’re free for us ❤
I really enjoyed the information you presented in this video. I am new to the market. Thank you!!!! You have yourself a new Subscriber!!!! Woot Woot!!!!
Awesome, glad it helped!
Great new info for me , I agree w/ u , I've had voo for while & I like it . But w/ this video I'm really understanding the 3 . Thank you
Awesome, glad it was helpful!
got a 4 fund: VOO, VDC, SCHD, DGRO. SCHD and DGRO are a combo dividend play. VDC invests in all consumer goods. Most of allocation goes into VOO. These are all in my personal account. Maxing a Roth out with a 4 mutual fund allocation (Dave Ramsey blend). Lets see how it all plays out in 30 years.
Mutual funds to me are a scam. The expense ratio and hidden fees. Actively managed hardly ever beats the passive.
What's the advantages is SCHD and Dgro blend being used together like that? And what proportions?
You should be in great shape
too many ETFs wont give extra returns. Overlapping stocks & ETFs are just a noise in the portfolio!!
VGT/SCHD is all you will ever need!! I currently own 5k shares of schd and 500 shares of vgt! Drop the mic!!! All done!!! No need to add or subtract! Game over!
impressive # on SCHD! im at 1k shares and working toward 5k in 20 yrs.
@@dt6750 it takes time, focus and dedication! You'll get there! Don't forget to buy at least 1 income property for taxes and cash flow! Ideally you want 4 but 1 is plenty! I have 6..
Any concern SCHD is drastically underperforming the market this year?
@@malikbeluga7545 absolutely not! If anything I might get another 1k if it goes to $65 bucks and another 2k if it goes to $60 bucks I'm all in when it comes to SCHD!
yeah, looks good if you r thinking on starting a dividend growth portfolio for retirement in the long run, or DGRO + SCHD (low weighted funds overlap)
Thanks!
Thank you so much, I appreciate it!
Brilliant content! Thank you!!!
Thank you, much appreciated!
Matt, just read your story. Wonderful! Looking forward to being a customer.
Thank you, that means a lot! I'll obviously be keeping people updated in my normal videos, but if you're interested in knowing when things happen consider signing up for the newsletter on the website. That's where I'm talking about stuff and provide updates every week. Thanks again!
This is the best break down video I’ve watched!
Thanks!
@@mattderron VOO for me!
My core is QQQM & VGT. I really believe that tech is and will continue to be the driving force in the market for the rest of my life. I have a 20+ year horizon so market fluctuations don’t worry me too much.
That's awesome I love it. The main thing is that you know what you've invested in and why
Great mix! A lot of growth power! I love QQQM and VGT, I have them on separate accounts.
You probably know this but if you’re looking at a pure play in tech, you’re better off going with just VGT. QQQ/QQQM aren’t strictly speaking pure tech. There’s others strictly focused on tech but VGT is probably at the top.
How has this been going for you? Do you plan to continue
I try to concetrate on fund overlap.That why I did not invest in the Vanguard 500 fund.Already,have the Total Stock Market.
Amazing knowledge! Question, what do you think about VONG compared to VOO/etc
Thanks, I'm not familiar with how VONG selects growth out of the Russell 1000 index, so I'd have to look into it to have any kind of intelligent opinion on it
So i see there are overlaps, but if I want to invest in both VOO and the broader market place, how do I fix this?
VOO, SCHD & Up until a month ago 30 day T Bills. Great information
Thanks!
Great video! What site is the total return on?
Pretty sure that was www.portfoliovisualizer.com
Good information, and I don't even understand the stock market. Thanks for sharing.
Glad it helped!
@mattderron - I just got stock and signed up with a broker. Can you tell me how to create a portfolio; and where I can get instructions how to add my stock to my broker's chart. I'm not sure if I'm using the right terms but if you understand what I'm trying to say, I really appreciate it, or are there UA-cam videos that will help? Thank you.
Thank you - good informative video. Thank you.
Thanks!
I admit I have some redundancies across ETFs plus stocks, but I use a stock intersection tool, so I know exactly how much of each stock I own!
The whole point of this video is to know what you're invested in, overlap in itself isn't a bad thing as long as it's what you intend, so you got it!
Informative, thank you!
This is a solid video. Keep it up 👍
Thanks!
I have about 60% in S&P 500, 10% mid cap index fund, 10% small cap index fund, 10% foreign index fund, 10% bonds/cash.
That's a great example of what I was talking about in terms of being able to dial in your allocations
Very well explained - new subscriber!👏 👏
Awesome, thanks!
Thanks for this video. Just now making big pay checks and wanting to invest. Thanks for pointing out specific examples and especially the last section on why this should matter. Those parts helped the most.
Awesome, glad it helped. Congrats on making big paychecks and wanting to invest!
This was incredible, thank you.
Thank you, glad it was helpful!
Great video! I admittedly clicked for the title, but the video is much more. At the start, investing is very confusing, but this broke a lot of things down in a way that I wish I was aware of on the outset. This is a good introduction to investing, keep it up.
Thanks glad it was helpful!
Thank you for this my bro.
Great video, really opened my eyes to some flaws in my current strategy!
Nice, glad it was helpful!
Great content! Thank you for this. I've been investing in both VTI and VOO thinking that this gave me a good mix of large to small cap exposure and not realizing the extent of the overlap. What ETFs should I be looking at for small and mid cap exposure to complement VOO?
I think Vanguard's mid and small cap ETFs are VO and VB, so you could simply add those in whatever allocation makes sense for you
What are your thoughts about owing voo and vang? The Russell growth etf .
Thanks for the video! I sold out of a couple laggard large cap mutual funds in the last few months and looking to redeploy that money in lower cost ETF’s, virtually every etf I look at…the exact same top 5 holdings. Apple, Microsoft, Nvidia, Google, Amazon, it’s impossible to escape. Vanguard actually had a couple lesser known ETF’s I found but they trade 7k shares a day and the bid/ask spreads are crazy.
Yeah that's tough, unless you go with a sector or style specific ETF there's going to be overlap
As a non-US person and not living in the US, I have very limited option to invest in the US market. Because I live in Asia. Correct me if I am wrong. Yes of course I can invest in the US stock market, but the big issue is that I am limited to investing upto USD60K, without triggering the Estate Duty, when a person passes on. Where I live, there is no double-tax treaty.
Your video is really a MAJOR eye-opener, something my Relationship Manager cannot or did not explain the differences or overlaps between these three ETF. Now I would have loved to do the VOO in addition to VTI, maybe I might rebalance my portfolio.
Now about that tax thing.....hmmmm.
Great video. Thanks !!!
Thank you!
@Matt Derron - If I have my money in Fidelity, does it just make sense to buy Fidelity’s index funds instead of Vanguard’s? For example, if I want to buy VOO should I just buy FXAIX and pay less expense ratio? That is what I am having trouble with. Convenience is telling me Fidelity but I want to make sure I’m not missing out on something Vanguard provides in VOO that Fidelity doesn’t in FXAIX. Thanks!
The only difference is that VOO is an ETF and FXAIX is a fund - it just means that with ETFs you can buy and sell throughout the day like a stock. Funds only trade at the end of day price. Other than that they are close to identical and absolutely nothing wrong with Fidelity’s offering.
I have my money with Schwab and usually look for Schwab equivalent funds whenever I do
@@mattderron Noted. Thank you, Matt. I just learned something 👍🏼.
voo is my best perfoming stock in my portfolio
I'm keen on diversification by way of categories rather than just random diverse stocks which may, and as you rightly point out, carry massive overlap.
I really appreciate your explanation. I am new to investing, when I went to Vanguard I was overwhelmed for the amount of product you can pick but I didn’t understand. Thank you for contributing greatly to my knowledge.
No worries, you're welcome!
Liked, subbed, commented. Solid information.
VGT is up too much for me in the past 10 years for me to invest into it. In the 10 years before that they ran each other pretty much even. I’m 100% into VTI and 100% in VFTNX in my 401k.
Thank you.
Good video. I have VOO and VGT.
I like VYM since its NOT heavily focused on technology. For Semiconductors, I have FSELX!
I hold VTI and am gradually adding VXUS for International exposure. The whole point of buying VTI is that I am exposed to everything by weight.
If I wanted to bet that the big companies would perform better on average, I'd have bought the S&P 500 instead of VTI. I didn't want to bet that any one set of companies would outperform expectations so I bought the whole thing by weight.
Thanks this has helped me move forward. I was stuck bc I didn’t know what to choose
Thanks for the video. I’m new to investing and I realized that I have 4 overlapping ETF’s, so I got rid of 2 and left with 2. After watching this video, I realized again that I am still overlapping with my remaining 2: VOO and VTI. I think will keep VOO and get rid of VTI since I have VTSAX in my other brokerage account; they are essentially the same thing except one is an ETF and other is an Index Fund. D’oh! I don’t know what I’m doing. 😅
No worries. Just to be clear - overlap itself isn’t always bad as long as you’re aware of it and it’s what you intend to do. For example - if you have VOO but you want higher allocation to tech and so you buy VGT - that’s ok. The main point is just to know what you’re invested in so you can make the best decisions for yourself. Hope that helps
I was trying to get the mid cap exposure with VTI, but it’s good info… I may need to make some minor adjustments…
I actually think the mid/small cap exposure can be good, but could we dial in the allocations better probably with some combo of VOO, VO, and VB? Probably
No love for VQT? It combine American stock + exposure to Canadian and emerging market stock. Or would multiple dedicated ETF be better?
Hey Matt, I was hoping to get your thoughts on this.
Below are my "work in progress" portfolios.
I'm not happy with these as I think them to be too growth-heavy with overlap:
1. { VUG, SCHD, FTEC, BRK.B, SOXQ, QQQM } for Roth
2. { IVV, SCHD, FTEC, SCHG, SOXQ, QQQM } for Taxable non-retirement
Backtrack testing on PortfolioAnalyzer has shown around 18% over 10 years for both.
Had to replace some ETFs with ones with longer track record Example, FTEC with VGT
Hi - just FYI it's really impossible for me to know if any type of portfolio is good for you because it depends on all of our own individual situations, risk tolerance, and investment goals.
In general the question I would ask is - do you know why you've added each one of those ETFs to your portfolio and what you hope they will contribute to your portfolio? For example you have both VUG and QQQM in portfolio 1. Obviously they are both different funds with different criteria - but both growth focused. Is there something you expect differently from one or the other? Is there something in QQQM that you want that's not in VUG?
Also - you have FTEC and SOXQ in the fund. FTEC is an information technology fund, SOXQ is a semiconductor fund - I'm guessing there is overlap in those since a lot of the semiconductor companies are in the IT sector? Is there a reason you have both there?
Lastly - it's good to look at historical performance to get an idea of how something has performed, but it's not a guarantee that it will continue to perform that way. So if you really believe in the semiconductor sector because of AI, then cool invest in that. Or if you really mostly believe in NVIDIA long term as it relates to AI, then invest in a fund that has it, etc. It's more about combining stocks and ETFs that complement each other as opposed to finding all of the ones that performed best before.
Hope this helps.
@@mattderron Thanks Matt, much appreciated. You've given me a few things to ponder. Initial goal was to maximize returns. Portfolios were created using R code with that sole objective in mind analyzing just historical returns. I'm trying to add relevant variables with each iteration to improve ETF selection. Thanks for the feedback & Happy New Year!🙂
If an investor has Fidelity (taxable, non-retirement account) and would like to invest in Vanguard's VOO, can he or she do that? What are the pros and cons?
Yes, VOO is an ETF, so just about any brokerage will allow you to buy it just like a stock.