Patience paid off for investors in 2020
Good things came to fund investors who waited in 2020. But, what a terrifying wait it was.
Mutual funds and exchange traded funds of all stripes delivered strong annual returns, even better than usual. Consider the largest fund by assets, a core holding of many 401(k) accounts. Vanguard’s Total Stock Market Index fund returned 19.5%, as of Dec. 22, more than double its average annual performance since 2000.
But first investors had to withstand a 34% plunge from February into March. Only by resisting the urge to sell and sidestep the pandemic-caused panic would they have gotten that full return.
The world has its first $1 trillion stock fund: Vanguard Total Stock Market Index (VITSX).
As of Nov 30, the Vanguard fund had $1,035,112,935,440 in assets. Launched in 1992, the Vanguard fund which has both traditional open-end mutual fund share classes and an exchange-traded fund share class is designed to be a core holding for investors, providing them exposure to the entirety of the U.S. stock market.
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