There's the original concept of indexing, which is capture as much of the world's investment

universe as possible, and you put it into a total market fund. For those, you're just trying to get

from the largest security in the U.S. to the smallest one that you can invest in. What you're

looking for there is all the securities that are equities and then you're thinking,

are they liquid enough and available enough for us to invest in?

Then you include them all.

That's the simplest version of indexing, and we do that all around the globe.

30% of the S&P 500 is made up by seven companies.

The S&P 500 should not be your benchmark nor your portfolio.

If you do that, you're exposed only to U.S. large cap companies.

500 securities, any investor wants diversification, needs to add small cap securities in,

a total market solution, you need global securities.

By the time you're done with that,

you've increased your universe about 50%. You've taken that exposure down by about half,

by global market cap weighting the globe, and he'd add in bonds.

I'm Ted Cydes, and this is Capital Allicators.

My guest on today's show is Rodney Kamichiez, the chief investment officer of Vanguard Capital Management and its head of global equity indexing, where he oversees

$8.5 trillion in index assets across domestic, international, and multi-asset strategies.

Rodney joined Vanguard 27 years ago and has worked across operations, customer service, risk management, and investing.

Our conversation covers the philosophy and mechanics behind running one of the world's largest

index fund operators.

We discussed Vanguard's ownership structure, values, product selection, and mechanics of delivering

...