If you're looking for a total-market index mutual fund with less reliance on technology stocks, here's the quick answer: Schwab Total Stock Market Index Fund (SWTSX) is your best bet. It offers broad market exposure with the lowest tech allocation (31.25%) among popular options. Fidelity’s FSKAX is another strong choice, balancing low costs and moderate tech exposure (32.85%). Vanguard’s VTSAX is a solid performer but has the highest tech concentration (38.00%).
Key Takeaways:
- SWTSX: Lowest tech exposure (31.25%), no minimum investment, low expense ratio (0.03%).
- FSKAX: Moderate tech exposure (32.85%), ultra-low expense ratio (0.015%), no minimum investment.
- VTSAX: High tech exposure (38.00%), low expense ratio (0.04%), but requires a $3,000 minimum investment.
Quick Comparison:
| Fund | Tech Exposure | Expense Ratio | Minimum Investment | Key Feature |
|---|---|---|---|---|
| SWTSX | 31.25% | 0.03% | $0 | Lowest tech allocation |
| FSKAX | 32.85% | 0.015% | $0 | Lowest expense ratio |
| VTSAX | 38.00% | 0.04% | $3,000 | Vanguard’s strong performance |
If you're concerned about overexposure to tech, SWTSX offers the most balanced option. For cost-conscious investors, FSKAX is ideal with its industry-leading low fees. VTSAX is great for those who can meet the higher investment threshold and are comfortable with a tech-heavy tilt.
For a more balanced portfolio, consider pairing these funds with sectors like utilities, consumer staples, or real estate to reduce tech concentration.
How We Become Millionaires: Our Top Investments | Vanguard, Schwab, Fidelity (Updated 2025)
1. Vanguard Total Stock Market Index Fund (VTSAX)
The Vanguard Total Stock Market Index Fund (VTSAX) is a widely favored choice for investors seeking comprehensive exposure to the U.S. stock market. As of September 30, 2025, the fund managed an impressive $2.0 trillion in total net assets, encompassing a portfolio of 3,529 individual stocks.
Sector Allocation (Technology Weighting)
VTSAX leans heavily toward technology, with tech stocks making up 38.00% of its holdings as of September 30, 2025. Other sectors include consumer discretionary at 14.30%, industrials at 12.20%, and financials at 11.30%. Smaller allocations are seen in healthcare (8.90%), energy (3.10%), and utilities (2.70%). This strong focus on technology might not appeal to investors who prefer to limit their exposure to a single sector, potentially undermining the fund's promise of broad diversification for those wary of concentrated risks.
Expense Ratio
What sets VTSAX apart is its affordability. The fund boasts an exceptionally low expense ratio of just 0.04% as of April 29, 2025, significantly undercutting the 0.74% average for similar funds. To put that into perspective, for every $10,000 invested, annual fees amount to only $4, compared to $74 for the average fund. On top of that, VTSAX doesn’t impose purchase fees, redemption fees, or 12b-1 fees, further enhancing its cost efficiency.
"Vanguard's refined indexing process, combined with low management fees and efficient trading, has provided tight tracking net of expenses." - Vanguard
2. Schwab Total Stock Market Index Fund (SWTSX)
The Schwab Total Stock Market Index Fund (SWTSX) gives investors access to the entire U.S. stock market, offering exposure across all market sizes and sectors. Let's break down its sector allocation, fees, and investment requirements to see how it balances broad market coverage with a diversified approach.
Sector Allocation (Technology Weighting)
As of September 30, 2025, technology makes up 33.84% of SWTSX's portfolio. Leading the tech sector are major players like NVIDIA Corp (6.97%), Microsoft Corp (5.90%), and Apple Inc (5.79%). Beyond tech, other key allocations include Financial Services (13.43%) and Consumer Cyclical (10.75%).
Additional sectors include Communication Services (9.75%), Healthcare (9.28%), and Industrials (8.68%). Notable tech holdings also feature Amazon.com Inc (3.26%), Meta Platforms Inc Class A (2.44%), Broadcom Inc (2.38%), and Alphabet (combined at around 4%). Smaller allocations round out the portfolio, such as Consumer Defensive (4.66%) and Energy (3.00%).
Expense Ratio
SWTSX stands out with its low expense ratio, which helps reduce management costs and maximize potential long-term returns. This makes it an attractive choice for cost-conscious investors.
Minimum Investment Requirement
With a low minimum investment requirement, SWTSX is accessible for those just starting their investment journey, offering an easy way to build a diversified portfolio without a significant upfront cost.
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3. Fidelity Total Market Index Fund (FSKAX)
The Fidelity Total Market Index Fund (FSKAX) provides extensive exposure to the U.S. stock market, with a portfolio that spans 3,806 securities from 3,739 issuers.
Sector Allocation (Technology Weighting)
As of September 30, 2025, FSKAX allocates 32.85% of its holdings to Information Technology, making it the fund's largest sector. Its top 10 holdings account for 34.18% of the portfolio, which helps mitigate the risk associated with individual stocks. The fund invests over 80% of its assets in stocks included in the Dow Jones U.S. Total Stock Market Index, ensuring broad market representation.
Expense Ratio
One of FSKAX’s standout features is its ultra-low expense ratio of 0.015%, as of April 29, 2025. This means investors pay just $1.50 annually for every $10,000 invested, keeping costs minimal.
Minimum Investment Requirement
FSKAX has no minimum investment requirement, making it accessible to investors at all levels who are looking to diversify their portfolios.
5-Year Annualized Performance
Over the past five years, FSKAX delivered an impressive annualized return of +15.70%, closely aligning with its benchmark return of +15.69% and outperforming the Morningstar Large Blend category average of +14.83%. The fund's net assets totaled $120.49 billion, reflecting strong investor trust and participation.
Advantages and Disadvantages
When comparing these funds, differences in cost, accessibility, and exposure to the tech sector play a critical role in shaping long-term returns. Here's a breakdown of these factors to help you weigh your options.
Cost efficiency is a major consideration. Fidelity's FSKAX stands out with the lowest expense ratio at 0.015% (just $1.50 per $10,000 invested), followed by Schwab's SWTSX at 0.030% ($3.00 per $10,000) and Vanguard's VTSAX at 0.04% ($4.00 per $10,000). These low costs can significantly impact your total returns over time.
Accessibility also varies. Fidelity's FSKAX and Schwab's SWTSX are highly accessible, requiring no minimum investment. In contrast, Vanguard's VTSAX has a $3,000 minimum, which may pose a hurdle for some investors.
Technology sector exposure is another key differentiator. Vanguard's VTSAX has the highest allocation to tech at 38.00%, which could increase concentration risk. Schwab's SWTSX offers the lowest tech exposure at 31.25%, making it a better option for those wary of a tech-heavy tilt. Fidelity's FSKAX falls in the middle at 32.85%.
| Fund | Technology Exposure | Expense Ratio | Minimum Investment | Key Advantage | Primary Drawback |
|---|---|---|---|---|---|
| VTSAX | 38.00% | 0.04% | $3,000 | Strong track record with Vanguard | High tech concentration and higher investment barrier |
| SWTSX | 31.25% | 0.030% | $0 | Lowest tech exposure among the three | - |
| FSKAX | 32.85% | 0.015% | $0 | Lowest expense ratio with no minimum | Moderate tech exposure |
Portfolio diversification is robust across all three funds. Fidelity's FSKAX holds 3,806 securities, while Vanguard's VTSAX includes 3,529 holdings. This broad market coverage helps reduce individual stock risk. However, all three funds still have significant assets concentrated in their top 10 holdings, which are dominated by large-cap tech companies like Apple, Microsoft, and NVIDIA.
One common downside is their considerable exposure to technology stocks. Even Schwab's SWTSX, which has the lowest tech allocation, still dedicates nearly a third of its portfolio to the sector. This may not suit investors aiming to avoid a tech-heavy focus.
Transaction costs are minimal across the board. Fidelity's FSKAX can be purchased without transaction fees, and Vanguard's VTSAX avoids purchase, redemption, and 12b‑1 fees. However, Vanguard's higher minimum investment could act as an indirect barrier for some.
Up next, we’ll outline recommendations to help you choose the most suitable fund for your investment goals.
Final Recommendations
The Schwab Total Stock Market Index Fund (SWTSX) provides broad market exposure with a smaller emphasis on technology, a competitive expense ratio, and no minimum investment requirement.
FSKAX stands out for its cost efficiency, offering an extremely low expense ratio, no minimum investment, and well-balanced market exposure.
For investors who can meet a minimum investment and are comfortable with a higher allocation to technology, VTSAX is another solid choice, backed by Vanguard's proven performance history.
Each of these funds highlights the importance of balancing costs with diversification. As market capitalizations shift, it's crucial to regularly review sector breakdowns to understand your exposure accurately.
Digital tools like Mezzi can help uncover hidden concentrations in your portfolio and ensure your investments align with your financial goals.
It’s also worth noting that even diversified funds tend to have significant technology exposure due to the sector's market dominance. If reducing tech allocation is a priority, consider pairing your total market fund with investments in less-represented sectors like utilities, consumer staples, or real estate.
Make it a habit to monitor and rebalance your portfolio quarterly to maintain your desired sector allocation as market dynamics evolve.
FAQs
How does the technology sector's dominance affect the performance of total-market index mutual funds?
The technology sector holds a major influence on the performance of many total-market index mutual funds because of its substantial share in the overall market. For example, several well-known funds dedicate a large portion of their portfolios to technology stocks, making their performance closely tied to the sector's fluctuations.
If you're aiming for broader diversification, it's crucial to examine a fund's sector weightings. Knowing how much of a fund is concentrated in technology can help you decide if it fits your investment goals and risk tolerance.
How can I diversify my portfolio if my chosen fund has a heavy focus on technology?
If your portfolio leans heavily toward the technology sector, it might be time to mix things up. Adding investments in other sectors or asset classes can bring balance. For example, look into funds centered on industries like healthcare, consumer goods, or financials. These options can offset the risks tied to a tech-heavy portfolio.
Beyond sector diversification, consider branching out into bonds, real estate investment trusts (REITs), or even international stocks. These choices broaden your portfolio’s scope, reducing reliance on a single market segment.
The goal? To spread investments across various sectors and asset classes, minimizing the impact of market swings in any one area. It’s a practical way to build a portfolio that’s better equipped to handle ups and downs.
Why does the expense ratio matter when choosing a mutual fund, and how can it impact your returns over time?
The expense ratio plays a key role in your investment's performance because it reflects the annual fee a mutual fund charges to cover its operating costs. This fee is taken directly from the fund’s assets, which means it reduces your overall returns. Funds with lower expense ratios let you hold on to more of your investment gains, which can have a powerful impact on your wealth over time, thanks to the magic of long-term compounding.
Even a small difference in expense ratios can lead to noticeable changes in costs over the years. For instance, a fund with an expense ratio of 0.10% will cost you far less over decades compared to one with a 1.00% ratio. When choosing a mutual fund, it’s always smart to compare expense ratios to keep costs low while staying on track with your investment goals.
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