Learn more about market capitalization
Market capitalization categorizes funds by the size of the companies they invest in. Stocks and stock funds fall into one of three capitalization categories: large-, mid-, and small-cap. Large-cap stocks tend to be stocks of well-established corporations with a long track record of steady earnings growth and reliable dividend payments. Small-cap companies tend to grow faster than large-cap companies, and typically use any profits for expansion rather than for paying dividends. They also tend to be more volatile than large-cap companies, and have a higher failure rate.
We believe your exposure to the large-, mid-, and small-cap segments should be aligned with the overall U.S. market.
How we determine market capitalization
Vanguard determines the "U.S. Stock Market" and "Difference From Market" percentages shown in the analysis using the MSCI® US Broad Market Index as a proxy for the U.S. stock market.
For Vanguard funds and brokerage holdings, prices and shares used to compute your current account value are as of the previous business day. For investments you entered in Outside Holdings, prices may be from today's close, especially if you're viewing them after the market close, which is generally 4 p.m., Eastern time.
Vanguard funds are categorized based on their long-term target allocation, not their actual holdings at a point in time. The portfolio holdings of the Vanguard Total Stock Market Fund are divided into component parts by market capitalization. Allocation data for non-Vanguard funds is the actual fund allocation on a specific date as supplied by Morningstar.
When determining fund-level allocations of non-Vanguard funds, which at times may hold small portions (10% or less) of their portfolios in noncore categories on a temporary, short-term basis, such noncore categories may be recategorized. In certain cases, the analysis accounts for these short-term variations by allocating them proportionately to a fund's core investment categories, as determined by the fund's overall type (for example, "Domestic Stock," "International Stock," etc.).
This approach is consistent with Vanguard's philosophy of investing for the long-term. In the context of a diversified portfolio, investors should view funds as relatively constant single holdings that serve defined subasset allocation roles, and should base investment decisions on the funds' ongoing appropriateness for those roles—not on minor changes in the underlying portfolios. In some instances, the fund-level allocation results may vary from those of other portfolio analysis tools or channels. However, we believe our results present the truest picture of overall asset allocation and best serve the interests of long-term investors.
Data Source Information
Morningstar, Inc., provided some of the information in this section.
Vanguard is not responsible for the accuracy of data provided by third parties.
Investments are subject to market risk. Prices of mid- and small-cap stocks often fluctuate more than those of large-company stocks.