What Is a Total Stock Fund?

A total stock fund is a type of investment fund that attempts to hold every stock in a specific stock exchange, or in a certain market. This type of fund has hundreds, or thousands, of stocks in its portfolio. One of the objectives of this type of fund is to provide returns that are on par with the movement of the stock market as a whole. Some total stock funds will also buy all of the stocks in a particular country or region.

When you invest in a total stock fund, you will not have to worry about volatility. The fund will be extremely diversified and it will move slowly, just as the stock market does. With this investment, you should also expect slow and nominal growth. Investing in this fund is considered to be a very safe investment. Even if one of the companies in the stock market goes out of business, it will not make much of a difference to the investors of this fund. They still have hundreds of other companies that are performing well and bringing the performance of the fund back up again.

blog comments powered by Disqus