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Exam details
A pooled investment that holds the same stocks/bonds as a market index (e.g., S&P 500), in the same proportions — passive.
Most active funds underperform benchmarks after fees over 10+ year horizons (SPIVA reports).
1) Broad diversification.
2) Low expense ratio (≤0.10%).
3) Liquidity (tight bid-ask, high AUM).
All Vanguard, broad US.
VTI: total US ETF.
VOO: S&P 500 ETF.
VTSAX: total US mutual fund (same as VTI).
Total US stock + Total International stock + Total bond. Adjust allocation to taste/age.