The main difference between the VTI (Vanguard Total Stock Market ETF) and the VOO (Vanguard S&P 500 ETF) lies in the scope of stocks that each of the ETFs cover.
Although both ETFs are equity-focused financial instruments run by Vanguard, they fulfill different purposes depending on the investor’s objectives.
The VTI tracks the performance of the CRSP US Total Market Index.
This index is market capitalization-weighted, meaning that companies with larger market caps influence the price of the index more than smaller caps.
Representing 100% of the US investable market, the index is comprised of 3500+ constituents spanning mega-cap, mid-cap, small-cap and micro-cap names.
On the other hand, the VOO mirrors the performance of the US S&P 500 – a market capitalization-weighted index that tracks the 500 largest names in the US stock market by market cap.
The S&P 500 is the most widely-recognized benchmark of US equity performance and is exclusively comprised of large-cap stocks.
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VTI
The VTI ETF was launched in May 2001 and uses the CRSP US Total Market Index as its benchmark.
Covering the breadth of the US stock market, the ETF tracks the performance of 3,500+ stocks and pays out quarterly dividends.
Given this broad exposure, the VTI is ideal for investors that have a bullish long-term view on US corporates and macroeconomic conditions.
The ETF also provides a modest dividend yield of 1.4% for income-seeking investors (as of Aug 8, 2024), but is primarily tailored for investors seeking a mix of growth and value investments.
As of June 30, 2024, the ETF had a cumulative market value of $1.6 trillion. Since its inception, VTI has delivered 8.74% annualized returns with a 10-year return of 12.53% (as of July 31, 2024).
VOO
The Vanguard S&P 500 ETF uses the S&P 500 as its benchmark.
As the most widely used barometer of the American stock market, the ETF tracks the performance of the 500 largest stocks powering the US economy.
Like the VTI, the VOO also issues a modest dividend yield of 1.36% paid on a quarterly basis, as of August 8, 2024.
While there are better ETFs to own for income-seeking investors, the VOO is a great addition to the portfolio for long-term investors seeking US equity market exposure.
If you are a fundamental investor seeking a blend of value and growth stocks with a bullish view on American markets and, the VOO is an ideal choice.
As of June 30, 2024, the ETF had a cumulative market value of $1.2 trillion and as of July 31, 2024, the ETF delivered 14.51% annualized returns since inception with a 10-year return of 13.11%.
VTI vs VOO Performance
VTI Annualized Performance (as of July 31, 2024):
- 3-Year: 7.96%
- 5-Year: 14.15%
- 10-Year: 12.53%
- Since inception: 8.74%
VOO Annualized Performance (as of July 31, 2024):
- 3-Year: 9.55%
- 5-Year: 14.95%
- 10-Year: 13.11%
- Since inception: 14.51%
VTI vs VOO Fees
Both VTI and VOO offer an identical Management Expense Ratio (MER) of 0.03%.
Compared to most other ETFs, this is considered an exceptionally low fee and reduces the tracking error of the ETF’s returns with its underlying benchmark.
VTI vs VOO Holdings
VTI:
Below are the top holdings within VTI as of June 30, 2024:
- Microsoft Corp. (6.34%)
- Apple Inc. (5.86%)
- NVIDIA Corp. (5.51%)
- Amazon.com Inc. (3.45%)
- Alphabet Inc. (3.72%)
- Meta Platforms Inc. (2.11%)
- Berkshire Hathaway Inc. (1.5%)
- Eli Lilly & Co. (1.48%)
- Broadcom Inc. (1.42%)
- Berkshire Hathaway Inc. (1.37%)
- JPMorgan Chase & Co. (1.11%)
The sector diversification for the VTI ETF is as follows:
- Technology (35.2%)
- Consumer Discretionary (13.8%)
- Industrials (12.1%)
- Health Care (11.9%)
- Financials (10.5%)
- Consumer Staples (4.3%)
- Energy (3.9%)
- Real Estate (2.6%)
- Utilities (2.6%)
- Telecommunications (1.9%)
- Basic Materials (1.7%)
VOO:
Below are the top holdings within VOO as of June 30, 2024:
- Microsoft Corp. (7.23%)
- NVIDIA Corp. (6.61%)
- Apple Inc. (6.6%)
- Amazon.com Inc. (3.85%)
- Alphabet Inc. (4.28%)
- Meta Platforms Inc. (2.4%)
- Berkshire Hathaway Inc. (1.6%)
- Eli Lilly & Co. (1.57%)
- Broadcom Inc. (1.52%)
- JPMorgan Chase & Co. (1.26%)
The sector diversification for the VOO ETF is as follows:
- Technology (29.6%)
- Financials (13.1%)
- Health Care (12.4%)
- Consumer Discretionary (10.3%)
- Communication Services (8.9%)
- Industrials (8.8%)
- Consumer Staples (6.0%)
- Energy (4.0%)
- Materials (2.4%)
- Real Estate (2.3%)
- Utilities (2.2%)
As of June 30, 2024
