We explore the difference between VTI vs VOO:
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 to decide between VTI vs VOO.
VTI vs VOO
The primary difference between VTI and VOO is that VTI comprises all the stocks in the U.S., while VOO only includes the stocks in the S&P 500 index.
VTI includes large, mid, and small-cap stocks, while VOO only includes large-cap stocks.
Another significant difference is the number of stocks in each, with VTI having 3,535 different companies in the index compared to 508 with VOO.
VTI
- Fund Inception: 2000
- Tracks the CRSP U.S. Total Market Index
- Expense Ratio: 0.03%
- Number Of Stocks: 3,535
- Admiral Shares (VTSAX)
VOO
- Fund Inception: 2010
- Tracks the S&P 500 Index
- Expense Ratio: 0.03%
- Number Of Stocks: 508
- Top 10 Holdings: 30%
- Dividend Yield: 1.27%
VTI vs VOO Performance
VOO and VTI performances are 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.
Here is how VTI and VOO's performance compares over the last 10 years:
As you can see from the chart, they perform almost identically.
Similarities between VOO and VTI:
- Vanguard ETFs
- Performance
- Broad Diversification
- Low Expense Ratios
VOO and VTI Differences
The main difference between VOO and VTI is the index they track. VOO tracks the S&P 500 index, while VTI tracks the total U.S. market.
This gives VTI more diversification and less volatility compared to VOO.
This leads to another significant difference: the number of holdings for VTI and VOO.
VTI holds over 3,500 stocks, while VOO holds roughly 500 stocks.
Differences between VOO and VTI:
- Different Number Of Holdings (500 vs. 3,500)
- Level Of Diversification (Large, Medium, Small Cap Stocks)
- Amount Of Volatility
VTI vs VOO Holdings
Vanguard's VOO has fewer holdings than VTI (508 vs. 3,535).
VTI and VOO have the same top 10 holdings in different proportions.
The difference is that VOO's top 10 holdings make up 28% of its total holdings compared to 24% with VTI.
VOO's performance will also have more volatility depending on the performance of these top 10 holdings.
Here are VTI and VOO's top 10 holdings side by side:
VTI and VOO's top holdings primarily comprise Apple, Microsoft, Amazon, Google, and Tesla.
Should You Hold Both VTI and VOO?
Owning both VTI and VOO may not be necessary for most investors as they each provide a great level of diversification at a low cost.
An overlap by weight of 83% makes owning both redundant.
It is possible that your employer's retirement plan does not include a total stock market index fund similar to VTI.
VTI and VOO Holdings Overlap
There is an overlap between VTI and VOO that includes 504 stocks.
Roughly 99% of VOO's holdings are included in VTI, and 13% of VTI's holdings are in VOO.
Here are VTI and VOO holdings overlap:
There is an overlap by weight of about 83%:
This gives VTI more diversification compared to VOO.
VOO Profile
- Fund Inception: 2010
- Expense Ratio: 0.03%
- Number Of Stocks: 508
- Top 10 Holdings: 30%
- Equivalent Institutional Fund (VIIIX)
Vanguard's S&P 500 ETF (VOO) launched in 2010 and is now a very popular Vanguard ETF.
The fund tracks the performance of the S&P 500 index, which holds the 500 largest U.S. stocks, weighted by market capitalization.
The S&P 500 usually serves as a benchmark for measuring the performance and overall health of the U.S. stock market.
Vanguard S&P 500 ETF attempts to duplicate the result of its underlying S&P 500 index by investing almost 100% of its assets in the same securities held in the index.
Each stock in the fund holds almost the same proportion of its weighting in the S&P 500 index.
VOO has a heavy large-cap weighting toward both growth and value stocks.
This is another way to say that its holdings are not just focused on the large-cap value category of the U.S. market but also the large-cap growth sector.
VOO Performance
Vanguard's VOO aims to have the same performance returns as the S&P 500 index.
Therefore, VOO and the S&P 500 should always overlap.
VOO Holdings
Here are the top 10 holdings for VOO:
Vanguard's VOO comprises Apple, Microsoft, Alphabet, Amazon, and Tesla and provides exposure to over 500 other stocks.
VOO has $731 billion in total net assets.
No Minimum Investment
VOO and VTI are exchange-traded funds (ETFs), so there is no minimum investment.
Investors looking to buy fractional shares can use platforms like M1 Finance. (Get $100 When You Use This Link To Create An Invest Account and Deposit $5,000 Within 30 Days)
Typically, 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 idle until you have enough to purchase a total share.
This especially benefits ETFs with a high share price, like VTI and VOO.
I also use Personal Capital to track my investment fees. They have a free Retirement Fee Analyzer that tells you the future impact of fees on your portfolio.
Personal Capital's free tools allow you to quickly find which of your investments has high fees so you can switch them to low-cost options. (Get a$20 Amazon Gift Cardwith this link when you add at least one investment account containing a balance of more than $1,000 within 30 days)
VTI Profile
- Fund Inception: 2001
- Expense Ratio: 0.03%
- Number Of Stocks: 3,535
- Top 10 Holdings: 25%
- Admiral Fund (VTSAX)
Vanguard Total Stock Market ETF (VTI) exposes investors 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 with an expense ratio of only 0.03%.
VTI Performance
Vanguard Total Stock Market ETF (VTI) is famous for many reasons, of which consistent returns are a significant part.
Here is VTI's performance over the last 10 years:
Its risk level is similar to that of the S&P 500.
In the previous 10 years, VTI has returned 14.21% per year.
VTI Holdings
Vanguard's VTI comprises Apple, Microsoft, Google, Amazon, and Tesla and provides exposure to over 3,500 stocks.
Here are the top 10 holdings for VTI:
Major sectors in the index include:
- Technology
- Healthcare
- Consumer Services
- Financials
- Industrials
The top 10 holdings make up 25% of its total net assets.
VTI has become one of the most popular index funds because of its strong diversification and ultra-low expense ratio.
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.
If you can afford to invest more than the minimum, choosing Vanguard admiral index funds is better because they usually have a lower expense ratio.
In this case, the expense ratio is the same, and VTI and VOO are ETFs.
Their matching 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 made a head-to-head comparison of VTSAX vs VFIAX!
ETFs are also available to trade 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 during market hours is not a benefit.
On the contrary, it can encourage bad habits like market timing and frequent trading.
An index fund might be a better option if you have these tendencies.
Lastly, if you prefer to have every penny invested, you will like that index funds offer fractional shares on the Vanguard platform.
On the contrary, ETFs must be bought one total share at a time unless you use a platform like M1 Finance. (Get $100 When You Use This Link To Create An Invest Account and Deposit $5,000 Within 30 Days)
That can sometimes lead to uninvested money while waiting for your next contribution.
This is more of a preference since I don't think it will significantly affect your returns.
Related Posts:
Is VTI or VOO Better Long Term?
VTI is better than VOO because it offers more diversification and less volatility for the same expense ratio of 0.03%.
VTI also includes large, mid, and small-cap companies compared to only large-cap with VOO.
VOO is ideal for investors who wish to concentrate on large-cap companies, while VTI is suitable for those who prefer a more diversified portfolio.
If you have limited options, don't worry about the differences, as either VOO or VTI will most likely perform well in the long run.
Both can be great options for long-term investors for those reasons.
However, if having a larger basket of stocks helps you sleep at night, VTI would be a better option.
Winner: VTI
Is VTI or VOO Better for Financial Independence?
VTI and VOO can get you to Financial Independence Retire Early (FIRE).
This is because they have similar returns on investment and rock-bottom expense ratios.
So, either option is an excellent investment for financial independence. I own both.
Calculate Your F.I. Number With My Free FIRE Calculator
[convertkit form=2812706]
That said, if I had 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.
Vanguard's VTI offers:
- Diversification
- Low Fees
- Vanguard Fund
Low fees are a guaranteed way to keep more money in your portfolio!
I would also suggest considering VTI's Admiral fundVTSAX.
