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Vanguard Total Stock Market ETF (VTI) and Vanguard S&P 500 ETF (VOO) are two of more than 80 ETF offerings from Vanguard, an investment giant with $8.1 trillion in assets under management as of December 2022.
What Is VTI?
VTI features large-, mid- and small-cap stocks across a variety of sectors led by technology and consumer discretionary. The ETF tracks the performance of the CRSP U.S. Total Market Index, which comprises more than 3,800 individual stocks—close to 100% of investable U.S. stocks—that are traded on the New York Stock Exchange and Nasdaq.
What Is VOO?
VOO tracks the performance of large-cap stocks that are part of the S&P 500, a closely watched stock index. Nearly one-third of the ETF’s 506 stocks are companies in the tech sector.
VTI vs. VOO: Similarities
Both VTI and VOO are in the Vanguard family of funds. However, the two ETF’s similarities don’t stop there. VTI and VOO share several other similarities and a handful of differences.
|   | Vanguard Total Stock Market ETF (VTI) | Vanguard S&P 500 ETF (VOO) |
|---|---|---|
Expense ratio | 0.03% | 0.03% |
Management style | Passive | Passive |
Benchmark | CRSP US Total Market Index | S&P 500 |
Minimum investment | $1 | $1.00 |
Inception date | 5/24/2001 | 9/7/2010 |
Minimum Investment
For both ETFs, the minimum investment is $1. By comparison, many other Vanguard funds impose $1,000 or $3,000 investment minimums.
Exposure to Certain Sectors
These ETFs have similar exposure to the tech sector—VTI at 30.1% of the portfolio’s stocks and VOO at 28.1%. They also have similar exposures to the health care sector, with VTI at 12.6% and VOO at 13.1%, as well as the financial sector, with VTI at 10.5% and VOO at 12.6%.
In contrast, exposure to tech stocks in the Morningstar U.S. Market Index is roughly 26%.
Top Holdings
As of July 2023, VTI’s top holdings were Apple at 6.52%, Microsoft at 5.54% and Amazon at 2.59%. Similarly, VOO’s top holdings were Apple at 7.53%, Microsoft at 6.47% and Amazon at 3.09%.
Expense Ratio
As of April 21, 2023, the expense ratio for VTI and VOO was 0.03%. That’s well below the industry average—excluding Vanguard—of 0.47% for ETFs and mutual funds as of December 2022. It’s also below Vanguard’s average of 0.08%.
Assets Under Management
When measured by total assets under management, VOO ranks as the third largest ETF in the world with $326 billion in total assets. VTI is right behind it, however, ranking as the world’s fourth largest ETF with $310 billion in total assets.
Management
Both VTI and VOO are passively managed. However, most ETFs are passively managed, meaning there’s more of a hands-off approach to investment decisions by Vanguard and other firms than when a fund is actively managed.
Performance
Based on market price, VTI boasts a 10-year average annual return rate of 12.07%, which is only slightly lower than VOO’s 12.61%. By comparison, the 10-year average for the Vanguard Mid-Cap Growth ETF is 10.73%.
VTI vs. VOO: Differences
Just as they share similarities, VTI and VOO have a number of differences.
Age
VTI has been around since 2001. That is slightly longer than VOO, which has been around since 2010.
Vanguard itself was founded in 1975. In all, Vanguard offers more than 200 investment funds in the U.S.
Share Price
As of Aug. 18, 2023, the price of a share of VOO is $400.92. That is nearly double that of VTI at $216.96.
Dividend Yield
VTI and VOO offer almost the same dividend yields—1.42% and 1.45% respectively as of July 31, 2023.
Expressed as a percentage, dividend yield tells an investor how much they will earn in dividends each year for every $1 they invest in an ETF.
Trading Volume
With a 50-day average volume of 3,940,585, shares of VOO are more heavily traded than shares of VTI, which has a 50-day average volume of 2,938,132.
Number of Stocks
Its portfolio of 3,861 stocks provides VTI with broader exposure to the stock market than VOO has with its portfolio of only 506 stocks.
Exposure to Consumer Discretionary Sector
VTI puts more weight on the consumer discretionary sector—14.4% of the portfolio’s stocks are consumer discretionary, which makes this the second largest sector holding in the fund itself. On the other hand, only 10.6% of VOO’s stocks fall in that category, making it the fourth largest sector holding for the fund.
Consumer discretionary refers to goods and services purchased on a discretionary basis. This category includes furniture, appliances, apparel and lodging.
Morningstar Rating
VOO earns a five-star rating from Morningstar, while VTI earns a three-star rating. Morningstar is an investment research and management company. Their star-ratings are backward-looking metrics based on an investment’s past performance.
Sustainability Rating
Both ETFs earn a sustainability rating of 3 out of 5 from Morningstar. This means both funds may not appeal to sustainability-minded investors.
Who Should Buy VTI?
If you’re looking for an ETF with a low expense ratio and an attractive annual return rate, VTI might be a good pick. The expense ratio is only 0.03%, and the 10-year annual average return rate is above 12%.
However, any bang for your bank that this ETF delivers will come at a high price. As of August 2023, VTI’s price exceeded $400 per share. Furthermore, the fund’s head-spinning number of portfolio stocks and heavy exposure to the tech sector may be drawbacks, especially for everyday investors.
Pros:
- Low expense ratio
- Broad exposure to stock market
- Attractive 10-year average annual return rate
Cons:
- High price per share
- Dizzying number of stocks
- Heavy exposure to tech sector
Who Should Buy VOO?
VOO packs a punch. Its low expense ratio of 0.03% and strong 10-year average annual return rate above 12% make it a good option for investors. Plus, the fund tracks the S&P 500, giving investors exposure to an array of large-cap stocks.
The minuses for VOO, however, include heavy exposure to three stocks—Apple, Microsoft and Amazon—and less diversification than VTI in terms of the number and types of stocks. But VOO’s performance has still outpaced the Morningstar large-cap blend category during the past three-, five- and 10-year spans.
Pros:
- Low expense ratio
- Attractive 10-year average annual return
- Outperformed Morningstar category during past three-, five- and 10-years
Cons:
- High exposure to three stocks—Apple, Microsoft, Amazon
- Heavy dependence on tech stocks
- Less diversification than VTI in terms of number and types of stocks
