Vanguard Funds: VTI vs VTSAX Comparison Guide

We cover the key differences between the Vanguard funds, VTI and VTSAX.

kent
|
Research Lead
Reviewed by: Lisa Barr
,
Edited by: Lisa Barr

If you’re looking for a low-cost total stock market index fund, the popular Vanguard funds VTI and VTSAX are likely to make your short list for consideration. While both funds track the same broad market index, VTI is an exchange-traded fund and VTSAX is a mutual fund.

In our comparison guide, we provide all the key details you need to know about VTI and VTSAX, including performance, expense ratios and the differences between ETFs and mutual funds, to determine if either of these funds will make a good addition to your portfolio.

Vanguard Funds: VTI vs VTSAX Basics  

VTI and VTSAX are both funds offered by Vanguard and they both seek to track the performance of the CRSP U.S. Total Market Index, which is a market-cap-weighted portfolio that provides total market exposure to the U.S. equity space. However, there are some subtle differences that may make one a better choice over the other for an investor.

What Is VTI?  

The Vanguard Total Stock Market ETF (VTI) is an exchange-traded fund offered by Vanguard Group, one of the largest investment management companies. VTI aims to track the performance of the CRSP U.S. Total Market Index, which represents the overall U.S. stock market by including a wide range of companies across various sectors and market capitalizations.

By investing in VTI, investors can gain exposure to a diversified portfolio of U.S. stocks in a single investment vehicle. As an ETF, VTI can be bought and sold throughout the trading day on an exchange, just like a stock. This provides investors with flexibility in terms of trading and liquidity, and allows them to manage their investments more easily than with traditional mutual funds.

What Is VTSAX?  

The Vanguard Total Stock Market Index Fund Admiral Shares (VTSAX) is a mutual fund offered by Vanguard. VTSAX seeks to replicate the performance of the CRSP U.S. Total Market Index, which represents the entire U.S. stock market by including stocks from various sectors and market capitalizations.

Therefore, VTSAX is a low-cost, passively managed index fund that provides investors with broad diversification across the U.S. stock market. As a mutual fund, VTSAX is designed for long-term investors who are seeking broad exposure to the U.S. equity market. VTSAX is one of Vanguard’s Admiral Shares funds, which offers its lowest expense ratios and requires a minimum investment of $3,000.

VTI vs VTSAX: Side-by-Side Comparison  

Here are the key metrics for comparing VTI and VTSAX, with data as of April 30, 2023:

MetricVTIVTSAX
AUM$283.1B$283.1B
Expense Ratio0.03%0.04%
1-yr return1.33%1.31%
3-yr return13.94%13.93%
5-yr return10.51%10.50%
10-yr return11.61%11.61%

VTI vs VTSAX: Key Takeaways  

As you’ll see in the table above, VTI and VTSAX are nearly identical in every way. The only difference is that VTI’s expense ratio is slightly lower at 0.03% compared with 0.04% for VTSAX. This is in alignment with other Vanguard comparisons, such as VOO versus VFIAX. The lower expense ratio gives VTI a slight edge in performance, especially for periods of less than 10 years. 

Investors should take note of unique feature of Vanguard ETFs that sets them apart from other ETFs. Most of Vanguard's ETFs were established as separate share classes of the company's mutual funds. In other words, in this case, holding VTI is no different than holding VTSAX with exception of one key difference: Investors can buy VTI during the day like stock, whereas investors aren't able to buy or sell VTSAX intra-day on an exchange.

VTI vs VTSAX: Performance

Performance for VTI and VTSAX is extremely close when comparing returns by net asset value (NAV). Thus, neither VTI nor VTSAX have an advantage over the other when comparing average returns over time.  

One caveat to note, however, is that the performance for VTI could differ, depending on the market price where an investor enters a position.  

For example, an ETF’s market price is the price at which investors can buy or sell an ETF on an exchange. NAV represents the value of a share’s portion of the fund’s underlying assets at the end of the trading day. If an investor bought shares of VTI during a given trading day, and the share price closed higher that day, the ETF investor would already have a gain.  

However, if an investor bought shares of VTSAX on the same day, they would buy at the fund’s NAV, which reflects the price of the fund’s underlying holdings after the market’s close.  

Investors should keep in mind that the price swing can move in the opposite direction during the trading day. Therefore, buying shares of an ETF like VTI could result in a decline in value before the trading day closes. On this given day, buying a mutual fund like VTSAX could have been an advantage.  

VTI vs VTSAX: The Differences  

The key distinctions between VTI and VTSAX are their trading structure, minimum investment requirements, expense ratios, trading flexibility and tax implications. Investors should consider their preferences, investment goals and trading habits when choosing between an ETF like VTI or a mutual fund like VTSAX.  

The main differences between VTI and VTSAX are:  

  • Investment structure: VTI is an exchange-traded fund, while VTSAX is a mutual fund. ETFs are traded on stock exchanges like individual stocks, allowing investors to buy and sell shares throughout the trading day at market prices. However, mutual funds are bought and sold directly through the fund company at the end-of-day NAV price. 
  • Minimum investment: VTSAX typically requires a higher minimum investment than VTI. For example, as of April 30, 2023, the minimum investment for VTSAX is $3,000, while the minimum investment for an ETF like VTI is generally the price of one share.  
  • Expense ratios: VTI has a lower expense ratio than VTSAX. For example, as of April 30, 2023, VTI has an expense ratio of 0.03%, while VTSAX has an expense ratio of 0.04%.  
  • Trading flexibility: VTI can be traded throughout the trading day, while VTSAX can only be bought or sold at the end of the trading day at the NAV price.  
  • Tax implications: Since VTI is structured as spinoff share class of VTSAX, the tax implications are the same as VTSAX, which may be a potential drawback for ETF fans.  For example, mutual funds like VTSAX may distribute capital gains to its shareholders at the end of the year, whether or not the investor has sold shares. Most ETFs would avoid this tax drawback, but VTI investors do not.

VTI vs VTSAX: The Similarities 

While there are some differences between the ETF and mutual fund structure, there are several similarities between VTI and VTSAX, including the fundamental investment approach, index tracking and diversification. 

The main similarities between VTI and VTSAX are: 

  • Underlying index: Both VTI and VTSAX aim to track the performance of the same underlying index, the CRSP U.S. Total Market Index. This index represents the entire U.S. stock market by including a wide range of companies across various sectors and market capitalizations. 
  • Investment strategy: Both VTI and VTSAX use a passive investment strategy. Instead of actively selecting individual stocks, they seek to replicate the performance of the underlying index by holding a diversified portfolio of securities that closely match the index composition. 
  • Diversification: Both VTI and VTSAX provide investors with broad diversification across the U.S. stock market. By investing in these funds, investors gain exposure to a large number of companies from different sectors and market segments, reducing the risk associated with investing in individual stocks. 
  • Fund provider: Both VTI and VTSAX are offered by Vanguard, one of the largest and most reputable investment management companies. It is well known for its focus on low-cost investing and providing investors with a wide range of index funds and ETFs. 
  • Performance tracking: Both VTI and VTSAX strive to closely track the performance of the underlying index. Their returns should reflect the performance of the U.S. stock market as represented by the CRSP U.S. Total Market Index, adjusted for fees and tracking error. 

VTI vs VTSAX: Who Should Invest  

Ultimately, both VTI and VTSAX can be good investment options for long-term investors seeking broad exposure to the U.S. equity market. Investors who prefer to trade during the day to take advantage of price fluctuations may prefer an ETF like VTI, whereas a more passive buy-and-hold investor may prefer a mutual fund like VTSAX.  

Since Vanguard's unique ETF structure makes VTI and VTSAX essentially share classes of the same fund, thus sharing the same returns and tax implications, the main reason to choose VTI is the ability to trade during the day. Therefore, investors who just want to buy and hold a total stock market index may be happy with VTSAX. Investors who want more trading flexibility may choose VTI.

Bottom Line  

The VTI versus VTSAX comparison is essentially a comparison of ETFs versus index funds. VTI is an ETF, which means it trades intraday on an exchange, just like a stock, whereas VTSAX is a mutual fund that trades once per day after the market closes. Beyond this structural difference, these two Vanguard funds are similar in that they track the same index and have identical performance when measured by NAV.  

While either of the two Vanguard funds can work well in a portfolio, investors should consider these factors and their individual investment goals and preferences when choosing between VTI and VTSAX. 

Kent Thune is Research Lead for etf.com, focusing on educational content, thought leadership, content management and search engine optimization. Before joining etf.com, he wrote for numerous investment websites, including Seeking Alpha and Kiplinger. 

 

Kent holds a Master of Business Administration (MBA) degree and is a practicing Certified Financial Planner (CFP®) with 25 years of experience managing investments, guiding clients through some of the worst economic and market environments in U.S. history. He has also served as an adjunct professor, teaching classes for The College of Charleston and Trident Technical College on the topics of retirement planning, business finance, and entrepreneurship. 

 

Kent founded a registered investment advisory firm in 2006 and is based in Hilton Head Island, SC, where he lives with his wife and two sons. Outside of work, Kent enjoys spending time with his family, playing guitar, and working on his philosophy book, which he plans to publish in the coming year.