Vanguard Funds: VTI vs VOO ETF Comparison
We provide a close look at the Vanguard ETF heavyweights.
Vanguard funds have long been popular choices for investors seeking low-cost index funds ideal for a buy-and-hold strategy.
In the exchange-traded fund space, the Vanguard S&P 500 ETF (VOO) and the Vanguard Total Stock Market ETF (VTI) are prime examples.
While VOO tracks the S&P 500 index, VTI tracks the broader CRSP US Total Market Index. Both exchange-traded funds can serve as a core holding in a long-term portfolio for almost any investor, from beginners to seasoned investors to professional money managers.
But which of these stock funds is best for your portfolio?
We provide a close look at VOO and VTI, covering the costs and key performance metrics, as well as their similarities and differences.
VTI vs VOO: Similarities and Differences
VOO and VTI are both popular Vanguard funds that offer broad exposure to the U.S. stock market. VOO tracks the S&P 500, focusing on large-cap companies, while VTI tracks the total U.S. stock market, including companies of all sizes.
Similarities
- Diversified choices: Both Vanguard funds offer diversification by investing in a broad range of U.S. companies.
- Cap-weighted, large-cap focus: While VTI and VOO are diversified funds, they both track a cap-weighted index, which means companies with the largest market caps receive the highest allocations, making them both mega-cap-dominated funds.
- Low-cost: Both ETFs are known for their low expense ratios, each at 0.03%, making them attractive to cost-conscious investors.
Differences
- Focus: VTI tracks the total U.S. stock market, including companies of all sizes. VOO focuses on large-cap companies, tracking the S&P 500 Index.
- Diversification: VTI offers broader diversification by including companies of all sizes, while VOO's focus on large-cap companies may provide a slightly less diversified exposure.
- Performance: The performance of VTI and VOO can vary depending on the performance of the underlying indexes. VTI may have slightly higher volatility due to its inclusion of smaller-cap stocks.
VTI vs VOO: AUM, Expenses, and Performance
| Metric | VTI | VOO |
| AUM | $421.1B | $498.5B |
| Expense Ratio | 0.03% | 0.03% |
| 1-yr Return | 22.79% | 23.90% |
| 3-yr Return | 6.69% | 8.37% |
| 5-yr Return | 14.48% | 15.24% |
| 10-yr Return | 12.07% | 12.71% |
Data as of September 4, 2024.
Breaking Down VTI and VOO ETF Performance
VTI provides broader diversification but has produced slightly lower returns in the past decade due to its inclusion of smaller-cap stocks. Remember that small-caps have historically outperformed large-caps. So, if history repeats or rhymes, the recent dominance of the latter may not continue over the next decade.
Bottom Line: VTI or VOO?
VTI and VOO are suitable choices for investors seeking broad exposure to the U.S. stock market. If you prefer a more diversified portfolio, VTI may be a better option, as it includes all VOO’s holdings, plus smaller companies. If you're comfortable with the concentration on larger-cap companies or are building a broader portfolio to include other funds, VOO can be a suitable choice.
Tip: For a deeper comparison, use etf.com's Compare ETFs tool: VTI vs VOO. Track these ETFs, market trends and more with etf.com's Markets Monitor tool.
