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HereForTheNerves t1_jaebvjn wrote

Reply to comment by stanolshefski in My Roth IRA is 100% invested into VTSAX. Is it an issue to keep investing in VTSAX each year? by dennisj9

This is a good point: how important is it to ensure that index funds are not overlapping? For instance, is it asinine to fund both VTSAX and VFIAX given that one is a subset of the other?

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stanolshefski t1_jaefu2d wrote

It's not important per se in these types of highly diversifed funds.

When the funds overlap, you're not changing diversification -- you're changing asset allocations.

I use Vanguard Total Stock Market Index Fund (VTSAX) along with Vanguard Small-Cap Index Fund (VSMAX) to get more mid-cap and small-cap exposure. My investment plan calls for taking more risk (and hopefully returns) by increasing my exposure to mid-cap and small-cap stocks.

However, all of the stocks in VSMAX (1,486 stocks) are in VTSAX (3,969 stocks).

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