We are going to explore the difference between Vanguard Total Stock Market ETF (VTI) vs Vanguard S&P 500 ETF (VOO).
When it comes to investing there is no shortage of fund options. Choosing between two funds can be difficult, but I will make it easy for you to decide between VTI and VOO.
VTI vs VOO
The primary difference between VTI and VOO is that VTI is comprised of all the stocks in the US while VOO only included the stocks in the S&P 500.
- Tracks the performance of the CRSP US Total Market Index
- Has an expense ratio of 0.03%
- No minimum initial investment
- Holds 3535 stocks
- Tracks the performance of the S&P 500 Index
- Has an expense ratio of 0.03%
- No minimum initial investment
- Holds 508 stocks
VTI vs VOO Performance
VOO and VTI performance is similar but not the same. They track different indexes meaning the performance will vary. However, they are very similar in their performance returns over 10 years.
Similarities between VOO and VTI:
- Vanguard Funds
- Similar Performance
- Broad Diversification
- Low Expense Ratios
Here is how their performance compares over the last 10 years:
As you can see from the chart, they perform almost identically.
VOO and VTI Differences
VOO vs VTI primarily differ in that VOO is tracking only the S&P 500. VTI has a more total United States diversification. By tracking over 3,000 stocks, VTI provides more diversification compared to VOO and its roughly 500 stocks.
Differences between VOO and VTI:
- Different Number Of Holdings (~500 vs ~3,500)
- Level Of Diversification (Large, Medium, Small Cap Stocks)
- Fund Inception: 2010
- Expense Ratio: 0.03%
- Number Of Stocks: 508
- Top 10 Holdings: 28%
Vanguard S&P 500 ETF (VOO) received a big endorsement when Warren Buffett himself recommended it!
The fund, as of April 30th, 2021, has $731.5 billion total net assets.
VOO is largely made up of Microsoft, Apple, Alphabet, Amazon, and Facebook and provides exposure to over 500 stocks.
No Minimum Investment
VOO and VTI are exchange-traded funds (ETFs) which means there is NO minimum investment. Investors looking to buy fractional shares can use platforms like M1 Finance.
Normally, fractional shares are not available for ETFs but with M1 Finance you can purchase fractional shares with no commission.
Buying fractional shares allows you to maximize your investment. You no longer have to keep your money sitting idle until you have enough to purchase a full share. This is especially beneficial when it comes to ETFs with a high share price like VTI and VOO (~$220/Share and ~$400/Share).
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VOO Historical Returns
Take a look at the historical chart below. You will see VOO and the S&P 500 closely overlap:
- Fund Inception: 2001
- Expense Ratio: 0.03%
- Number Of Stocks: 3535
- Top 10 Holdings: 22.9%
Vanguard Total Stock Market ETF (VTI) provides investors with exposure to the entire U.S. equity market. The U.S equity market includes small, mid, and large-cap growth and value stocks.
VTI was created in 2001 and currently has an expense ratio of only 0.03%.
VTI is largely made up of Microsoft, Apple, Amazon, and Google and also offers exposure to over 3500 stocks.
Over the last 10 years, VTI has returned an average of 14.21% per year as of May 31, 2021.
VTI has become one of the most popular index funds because of its strong diversification and ultra-low expense ratio.
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Index Funds vs Exchange Traded Funds (ETFs)
Exchange-traded funds (ETFs) are usually a more accessible option for new investors since they don’t have a minimum investment. In comparison, if you can afford to invest more than the minimum, it’s usually a better option to choose Vanguard admiral index funds because they usually have a lower expense ratio. In this case, the expense ratio is the same and both VTI and VOO are ETFs.
Their equivalent admiral funds are:
VTI = Vanguard Total Stock Market Index Fund Admiral Shares (VTSAX)
VOO = Vanguard 500 Index Fund Admiral Shares (VFIAX)
To make it easy, I also did a head-to-head comparison of VTSAX vs VFIAX as well!
ETFs are also available to trade at anytime the market is open. Index funds are bought after the market closes and the price settles. Depending on your views, this can be a good or bad thing. For long-term investors, the ability to trade anytime in the day is not a benefit. It can encourage bad habits like market timing and frequent trading. If you have these tendencies, then an index fund might be a better option for you.
Lastly, if you prefer to have every penny invested then you will like that Index funds offer fractional share buying on the Vanguard platform. On the contrary, ETFs have to be bought one full share at a time unless you are using a platform like M1 Finance. That can sometimes lead to money left uninvested while you wait for your next contribution. This is more of a preference since I don’t think it will make a significant difference in your returns.
Which is Better VTI or VOO?
VTI and VOO are very similar investments. VTI offers more diversification since it holds about 7 times more stocks. However, this hasn’t made a difference in their performance since they have both had virtually the same returns over the last 10 years.
For those reasons, I would say both are a great option for long-term investors. If having a larger basket of stocks helps you sleep at night, then VTI would be a better option.
Is VTI or VOO Better for Financial Independence?
Both VTI or VOO can get you to Financial Independence Retire Early (FIRE). They both have a similar return on investment and have rock bottom expense ratios. So, either option is a great investment for financial independence. I actually own both.
That being said if I have to choose just one it would be:
My Winner: VTI
My winner is VTI based on it having a more diversified portfolio with over 3,500 holdings. This is only my opinion.
Feel free to tell me your pick in the comments below.
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This post may have affiliate links, which means I may receive commissions if you choose to purchase through links I provide (at no extra cost to you). Thank you for supporting the work I put into this site!
This information is my opinion and is for information purposes only. It is not intended to be investment advice. Seek a duly licensed professional for investment advice.
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VTI vs VOO
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Two popular and highly liquid Vanguard ETFs are ticker symbol VOO (S&P 500) and VTI (Total stock market). These are both stock market index exchange traded funds but perform differently.
VOO invests in stocks that make up the S&P 500 Index. It holds around 500 of the largest U.S. companies. Its goal is to track the index’s return, this is considered a metric of the overall U.S. big cap stock returns. VOO has a high probability for long term growth of investment capital. This is an equity ETF so the share prices rise and drop faster and more sharply than bond funds. It is a good choice for long-term investment goals of consistent growth and safety.
VTI tracks the performance of the CRSP US Total Market Index which is composed of large-cap, mid-cap, and small-cap stocks that are diversified for growth and also value. VTI uses a passively managed index-sampling portfolio strategy. This ETF remains fully positioned in the tracked index. It is a very low expense ETF that does not interfere much with compounded growth of the index performance.
- VOO comprises approximately 82% of VTI by weight, but VTI holds the other approximate 18% of capital in mid-cap and small-cap exposure.
- VTI can be more volatile than VOO with the higher beta stocks included.
- VTI tends to outperform VOO over the long term with the smaller stocks in the ETF that tend to grow more over time than the big caps in VOO.
- VOO has approximately 500 holdings and VTI has close to 3,500 holdings, so VTI is more diversified by company, market cap, and sector.
- Both VOO and VTI have a very low expense ratio of 0.03%. 
Think of VOO as being the same as the SPY ETF and the large cap exposure in your stock portfolio representing the biggest most successful companies in the U.S. that is one of the primary buy an hold strategies that Warren Buffett recommends for passive long term investors.
VTI is a way to invest in the total stock market giving both the safety of the big caps but also including stocks that can still multiply in price and enter the larger indexes over time. VTI gives a more complete investment into the U.S. stock market with more potential reward that also comes with more risk adding companies that could be big winners or big losers.
Both choices are great options for investors but a portfolio doesn’t need to hold both as they overlap, VTI will give you S&P 500 index exposure so no need for VOO in the same portfolio as VTI unless looking for multiple exposure to the S&P 500.
VOO vs. VTI – Vanguard’s S&P 500 and Total Stock Market ETFs
Two of the most popular stock market index ETFs are the Vanguard S&P 500 ETF (VOO) and the Vanguard Total Stock Market ETF (VTI). Here we’ll dive into their differences, similarities, and performance.
In a hurry? Here are the highlights:
- VOO and VTI are the two most popular U.S. stock market ETFs out there. Both are from Vanguard.
- VOO tracks the S&P 500 Index. VTI tracks the CRSP US Total Market Index.
- As such, VOO is entirely large-cap stocks, while VTI also includes small- and mid-cap stocks.
- Specifically, VOO comprises roughly 82% of VTI by weight.
- Consequently, VTI has been – and should be expected to be – slightly more volatile than VOO.
- Since it contains small- and mid-caps, which have outperformed large caps historically due to the Size factor premium, we would expect VTI to outperform VOO over the long term, and indeed it has historically.
- VOO has roughly 500 holdings and VTI has roughly 3,500 holdings, so VTI can be considered more diversified.
- Both VOO and VTI have the same expense ratio of 0.03%.
- VTI is much more popular than VOO.
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VOO vs. VTI – Differences in Methodology and Composition
If you’ve landed here, you probably already know that stocks are a significant driver of portfolio returns, and that index funds are a great, low-cost way to get immediate, broad diversification across asset classes. You also probably already know that Vanguard has some of the lowest fees around and has a solid track record of providing ETFs that accurately track their indexes.
The Vanguard S&P 500 ETF (VOO) is one of the most popular stock ETFs out there. It was established in 2010. The fund seeks to track the famous S&P 500 Index, holding the 500 largest U.S. companies. This index is considered a sufficient proxy and barometer for “the market” in the U.S. The mutual fund equivalent for VOO is VFIAX.
The Vanguard Total Stock Market ETF (VTI) provides similar broad exposure to the U.S. stock market, with the addition of small- and mid-caps. It was established in 2001. The fund seeks to track the CRSP US Total Market Index. This ETF holds over 3,500 U.S. stocks across all cap sizes. Specifically, VTI is comprised of roughly 82% large-cap, 12% mid-cap, and 6% small-cap stocks. In other words, VOO comprises roughly 82% of the broader VTI. Put more simply, VOO is already inside of VTI. The mutual fund equivalent for VTI is VTSAX.
People hear of these two popular ETFs and wonder which one they should go with, or if they should utilize both. It is one of the questions I see asked most often on Reddit.
The only real difference between VOO and VTI is that VTI includes small, mid, and large cap stocks, while VOO is only large-cap stocks. Since VTI is market cap weighted, meaning weighted by the size (the market capitalization) of the constituent stocks, about 82% of VTI’s weight is VOO, with the other 18% being those smaller companies. That 18% is about 3,000 stocks.
Since small- and mid-cap stocks tend to be more volatile than large-caps, VTI should be – and has been – slightly more volatile than VOO. Because VOO holds about 500 stocks and VTI holds about 3,500, VTI can also be considered more diversified than VOO.
Now let’s look at the performance of VOO vs. VTI.
VOO vs. VTI – Historical Performance
Note that small- and mid-cap stocks have outperformed large-caps historically because they are considered riskier; this is known as the Size risk factor premium. Thus, we would expect VTI to slightly outperform VOO over the long term, and indeed it has historically, using their underlying indexes going back to 1972:
As we’d also expect due to its inclusion of smaller stocks, VTI has been slightly more volatile than VOO, meaning its variability of returns – measured by standard deviation – has been greater. VTI has delivered a higher return, but the risk-adjusted return (Sharpe) of these funds is identical.
VOO vs. VTI – AUM and Fees
Though both funds are highly liquid and extremely popular, Vanguard’s VTI is much more popular with over $910 billion in assets under management. VOO has roughly $550 billion in assets.
Expense ratio for these funds is the same at a low 0.03%.
VOO and VTI are highly correlated, as the former makes up about 82% of the latter by weight. Because of this, their historical performance has been very close, but we would expect VTI to slightly outperform VOO over the long term due to its inclusion of small- and mid-cap stocks, and indeed it has historically. Conveniently, VTI can also be considered more diversified, as it holds about 3,000 more stocks than VOO. This contrasting number of holdings and subsequent cap size exposure is the primary difference between VOO and VTI.
The investor who for some reason is only seeking lower volatility large-cap stocks will want to go with VOO, tracking the S&P 500 Index. Those desiring greater diversification and greater expected returns, at the cost of slightly greater volatility, will want to go with VTI to capture the entire U.S. stock market. Alternatively, you might use VOO in combination with a small cap value fund; that’s what I do in my own portfolio.
In any case, both VOO and VTI are solid choices to get broad exposure to the U.S. stock market. Some employer-sponsored retirement plans may only offer one of these funds and not the other. Keep in mind you may see their mutual fund equivalents, which are VFIAX for VOO and VTSAX for VTI.
Disclosure: I am long VOO and VTI in my own portfolio.
Disclaimer: While I love diving into investing-related data and playing around with backtests, I am in no way a certified expert. I have no formal financial education. I am not a financial advisor, portfolio manager, or accountant. This is not financial advice, investing advice, or tax advice. The information on this website is for informational and recreational purposes only. Investment products discussed (ETFs, mutual funds, etc.) are for illustrative purposes only. It is not a recommendation to buy, sell, or otherwise transact in any of the products mentioned. Do your own due diligence. Past performance does not guarantee future returns. Read my lengthier disclaimer here.
VOO vs VTI
Both VOO and VTI are ETFs. VOO has a lower 5-year return than VTI (17.47% vs 17.55%). VOO and VTI have the same expense ratio (0.03%). Below is the comparison between VOO and VTI.
|Segment||Equity: U.S. - Large Cap||Equity: U.S. - Total Market|
|Management Style||passive (index-based)||passive (index-based)|
|Underlying Index||S&P 500||CRSP US Total Market Index|
The Fund seeks to track the performance of its benchmark index, the S&P 500. The Fund employs an indexing investment approach. The Fund attempts to replicate the target index by investing all of its assets in the stocks that make up the Index with the same approximate weightings as the Index.
VOO performance & returns
VOO expense ratio is 0.03%.
Top 10 Holdings (27.95% of Total Assets)
|Facebook Inc A||FB||2.33%|
|Alphabet Inc A||GOOGL||1.79%|
|Alphabet Inc Class C||GOOG||1.76%|
|Berkshire Hathaway Inc Class B||BRK.B||1.46%|
|Johnson & Johnson||JNJ||1.33%|
|Procter & Gamble Co||PG||1.26%|
Other relevant VOO comparisons
You may also want to check out the following VOO comparisons that investors often look for on Finny
Or use Finny Compare Wizard to create a comparison you’d like to see.
The Fund seeks to track the performance of a benchmark index that measures the investment return of the overall stock market. The Fund employs an indexing investment approach to track the performance of the CRSP US Total Market Index. The Fund invests by holding a collection of securities that approximates the Index.
VTI performance & returns
VTI expense ratio is 0.03%.
Top 10 Holdings (22.98% of Total Assets)
|Facebook Inc A||FB||1.95%|
|Alphabet Inc A||GOOGL||1.50%|
|Alphabet Inc Class C||GOOG||1.41%|
|Berkshire Hathaway Inc Class B||BRK.B||1.16%|
|Johnson & Johnson||JNJ||1.11%|
|Procter & Gamble Co||PG||1.05%|
|Visa Inc Class A||V||0.94%|
Other relevant VTI comparisons
You may also want to check out the following VTI comparisons that investors often look for on Finny
Or use Finny Compare Wizard to create a comparison you’d like to see.
You can check out all comparisons Finny users have looked for here. Feel free to the browse the list and view the comparisons that are of an interest to you.
Vs voo vti
VOO vs. VTI: Which ETF Is a Better Investment?
Passive investing in index funds is more popular than ever.
There is a good reason for this. Research shows that passively managed index funds provide higher returns than over 90% of active professional fund managers.
However, there are thousands of funds and hundreds of companies making them. Not all of them are equal.
Of the many companies that provide index funds, Vanguard is one of the biggest and most trusted. Millions of people invest in their funds, and they collectively have over $5 trillion in assets under management.
Two of Vanguard's exchange-traded funds (ETFs) are particularly popular. Both of them provide exposure to the US stock market:
- VOO: This ETF tracks the S&P500 index and holds 508 stocks.
- VTI: This is a more diversified ETF that holds all the S&P500 stocks, but also many mid-cap and small-cap stocks. It holds 3551 stocks in total.
This article examines the differences between VOO and VTI and which one is likely to be a better investment.
VOO: Vanguard S&P 500 ETF
- Assets: $500.9 billion
- Holdings: 508 stocks
- Dividend Yield: 2.03%
- Expense Ratio: 0.03%
The Vanguard S&P500 ETF (VOO) is one of the biggest index funds that track the S&P500, with $500 billion in assets under management. It also has one of the lowest expense ratios, making it very popular among passive index investors.
Like other S&P500 ETFs, it holds a market-cap weighted index of the 508 stocks in the S&P500. All of these are US-based companies that are categorized as "large-cap," meaning they have market capitalizations higher than $10 billion.
Even though the S&P500 only represents 500 companies, some of them have two or more classes of stock. This explains why the index has 508 stocks, not 500.
An example of a company with two classes of stock is Alphabet, the parent company of Google that trades as both GOOGL and GOOG.
VTI: Vanguard Total Stock Market ETF
- Assets: $840.9 billion
- Holdings: 3551 stocks
- Dividend Yield: 1.95%
- Expense Ratio: 0.03%
Vanguard's Total Stock Market ETF (VTI) is similar to VOO in many ways, but the main difference is that it holds a much broader range of stocks.
It follows the CRSP US Total Market Index, which includes all the stocks in the S&P500 plus over 3000 additional stocks. This represents the entire US stock market.
Unlike ETFs that follow the S&P500, VTI also holds many mid-cap and small-cap stocks.
For this reason, VTI is considered to provide broader exposure to the US stock market and is more diversified. However, because it is weighted by market cap, the biggest US companies also constitute a very large percentage of the ETF's holdings.
Although VTI has over 3000 more stocks than VOO, these are only a small percentage of the fund's holdings because their market caps are so small.
VOO vs. VTI: Key differences
This is a summary of the key differences between VOO and VTI:
|Index||S&P500||CRSP US Total Market|
|Assets||$500.9 billion||$840.9 billion|
Both ETFs have the same top 10 stock holdings:
- Apple (AAPL)
- Microsoft (MSFT)
- Alphabet (GOOGL)
- Amazon (AMZN)
- Facebook (FB)
- Berkshire Hathaway (BRK.B)
- Johnson & Johnson (JNJ)
- JP Morgan (JPM)
- Visa (V)
- Procter & Gamble (PG)
For VOO, the top 10 stocks amount to 24.8% of the ETF's holdings. For VTI, the same top 10 stocks amount to 20.7% of the holdings.
So, even though VTI is more diversified than VOO with exposure to mid-caps and small-caps, the biggest companies are still responsible for most of the returns.
VOO vs. VTI: Performance
The biggest holdings are the same for VOO and VTI, so their performance in the past has been similar but not identical.
Here is the average annual performance for the two ETFs as of December 31st, 2019:
*Note: 10-year performance for VOO is estimated from the returns of the S&P500 index because the ETF hasn't existed for ten years.
It is clear that VOO has had slightly better returns than VTI in the past few years, but the difference is so small that it is almost negligible.
Here's a chart that compares their performance from January 2011 to February 2020:
If you had invested $10,000 in either of these funds in January 2011, here's how much money you would have today:
- VOO: $28,337 with a compounding annual growth rate (CAGR) of 12.03%.
- VTI: $27,602 with a CAGR of 11.71%.
VOO has not only had slightly better returns, but it has also been somewhat less volatile. The max drawdown during this period was -16.18% for VOO but -17.58% for VTI.
This makes sense since mid-cap and small-cap stocks tend to be more volatile than large-cap stocks. They often go down significantly during market corrections.
Which ETF is the better investment?
In the past few years, VOO has had better investment returns and greater price stability than VTI.
Based on that, VOO has historically been a better investment than VTI. However, past performance is no guarantee that the same will continue to occur in the future.
For this reason, it is impossible to say with any certainty which one will be the better investment moving forward.
VOO has had slightly better returns in the past, but VTI is more diversified and provides broader exposure to the US stock market.
The chances are high that the returns of these two ETFs will continue to be very similar in the future. Both have the same expense ratio and similar dividend yield, so you should choose whichever one you prefer based on the fund's strategy.
If you only want to own the biggest and safest companies, choose VOO. If you want broader exposure and more diversification, choose VTI.
Or you could also invest in both, for example, by putting half in VOO and half in VTI. Commissions are incredibly low these days (and often completely free), so it shouldn't cost you much more to invest in both of them.
Here's a summary of which one to choose:
- If you want to own only the biggest and safest stocks, choose VOO.
- If you want more diversification and exposure to mid-caps and small-caps, choose VTI.
- If you can't decide, consider simply buying both of them (assuming that commissions are low or free).
However, keep in mind that both ETFs can be highly volatile as they are 100% invested in stocks. Sometimes they may go down 50% or even more, although long-term returns have historically always been good.
Better Buy: VTI vs. VOO
While the benefits of index fund investing are well established, deciding which funds to choose opens up a wider debate. You might find yourself on Vanguard's account page struggling to decide between two similar funds. You might also wonder if there's a point in holding multiple funds covering the same segments of the market.
The truth is, the VanguardTotal Stock Market ETF(NYSEMKT:VTI) and the VanguardS&P 500 ETF(NYSEMKT:VOO) are quite similar but also different enough to merit separation. Let's look at when each fund would be a better buy for your portfolio.
Vanguard Total Stock: A minimalist's dream
Vanguard's Total Stock Market ETF is a preferred holding for someone who values simplicity. If you want to buy a single fund and hold it forever, you really can't go wrong with Vanguard Total Stock.
For a paltry 0.03% a year, you'll get effective exposure to all the publicly traded companies in the U.S. stock market, including mid-cap and small-cap companies. Your performance will match the total aggregate performance of the U.S. stock market, assuming you don't trade in and out of the fund.
Vanguard Total Stock is best held in portfolios as the only holding or paired perhaps with an international stock fund. It's the quintessential low-cost, set-it-and-forget-it market tracker. Over long periods of time, Vanguard Total Stock has vastly outperformed large swaths of expensive fund managers and other active traders.
Image source: Getty Images.
Vanguard S&P 500: For the slightly more active investor
Vanguard's S&P 500 ETF is better choice than Vanguard Total Stock in a few scenarios. First, let's say you already own a variety of mid- and small-cap funds in your portfolio. Rather than buying Vanguard Total Stock -- which would cause redundant holdings -- Vanguard S&P 500 may serve as a more practical complement to the funds you already own.
Next, Vanguard S&P 500 simply tracks the S&P 500, thereby omitting other market segments. If you only want large-cap companies in your portfolio -- perhaps due to greater perceived risks of less established companies -- there would be no real issue with owning just Vanguard S&P 500.
Vanguard S&P 500 might also be preferred in a portfolio where the investor wants greater discretion over specific holdings. For example, if you were to hold Vanguard S&P 500 along with mid-cap, small-cap, and micro-cap funds, you'd be able to easily move from one segment to the next with greater control. Total market funds, on the other hand, give you a prescribed allocation that you won't be able to alter.
As you can see in the chart below, the performance of the two funds is nearly identical (with a very slight nod going to Vanguard Total Stock).
Vanguard Total Stock data by YCharts
One way you might want to view these funds is as ideal tax-loss harvesting partners. If the market were to go down by 30% as it did last March, you could lock in a loss on one fund and jump right into the other. This would allow you to apply the realized loss against any future realized gains and lose no time in the market along the way.
Another major factor in deciding between the two is your current portfolio. If you are just starting out and haven't yet made any investments, Vanguard Total Stock is likely the better buy. If you're already invested in several market segments and are looking for the best fund to complement your existing portfolio, there are ways to make Vanguard S&P 500 work.
But the most important takeaway is this: Both are great long-term investments. It really isn't necessary to hold both funds, but if you find yourself deciding between the two, you're 99% of the way home. Like with most investments, it simply depends on your preferences as well as your current holdings. Still, it's undeniable that you'll be in a better position to make a decision if you know how the two funds differ and the situations in which either would be the better choice.
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