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IVV and VTS overlap

Investing Strategy

I’m new to investing. Is it worth holding lVV with around 500 companies and VTS with around 3800 companies. I’m thinking lm getting more overall market share, to invest in with large cap to small cap companies, spreading my risk. Cheers, Paul

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Paul Leslie Fodor

Asked on 19 July 2023

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Dave Gow - Strong Money Australia

Investor

Fri, 21st July 2023

Hey Paul.

As you’ve suggested, there’s a huge overlap with those two particular funds. So I’m not sure whether it makes sense to hold both? Personally I would just pick one given they are extremely similar.

It’s worth remembering that given those two funds are ‘market cap’ weighted, it means the vast majority of the fund is invested in the biggest companies. This means that VTS, while having a lot more companies and being more diversified, will still perform very similar to IVV over time.

Either way, both are popular choices for long term investing in US shares, so there’s no wrong choice.

Cheers, Dave

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