Prediction: The Vanguard Total Stock Market Index Fund ETF Will Soar Over the Next 20 Years. Here's the No. 1 Reason Why.

Key Points

• Stock market indexes are hovering near all-time highs.

• This ETF remains a promising bet, according to the data.

• 10 stocks we like better than Vanguard Total Stock Market ETF ›

The Vanguard Total Stock Market Index Fund ETF (NYSEMKT: VTI) is one of the most popular exchange-traded funds (ETFs) on the planet. The fund has net assets of nearly $2 trillion.

With stock indexes hovering near all-time highs, many investors are worried that this historically successful ETF will struggle in the years to come. But there's one critical piece of data that suggests otherwise.

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This ETF remains a data-backed investment

The Vanguard Total Stock Market Index Fund ETF is a classic pick for savvy long-term investors. That's because the ETF tracks the holdings of the CRSP US Total Market Index, which includes almost every type of company imaginable -- everything from small-caps and large-caps to value stocks and growth stocks.

The ETF is incredibly diversified with more than 3,000 holdings, but investors should note that only U.S. companies are included. Many of those U.S. companies, however, have global operations, providing some level of international diversification.

Image source: Getty Images.

With an expense ratio of just 0.03%, the Vanguard Total Stock Market Index Fund ETF is one of the cheapest ways investors can get broad access to nearly the entire stock market. But with the indexes already at all-time highs, is this ETF still a smart pick? If your holding period is 20 years or more, the answer is absolutely. That's because there has never been a 20-year period where the U.S. stock market has posted a negative return.

Of course, returns for any given 20-year period vary widely. But here's a good example of how buying market indexes like this, even at their peaks, is a wise long-term decision. If you purchased shares of VTI in 2007 at their pre-cash peak, you still would have accumulated a 338% return over the next 18 years. So long-term investors can rejoice: The Vanguard Total Stock Market Index Fund ETF remains a solid pick for the decades ahead.

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Ryan Vanzo has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Vanguard Total Stock Market ETF. The Motley Fool has a disclosure policy.