Are you looking to invest in a Vanguard ETF but unsure which one to choose? In this article, we will compare two popular options: the Vanguard Total Stock Market ETF (VTI) and the Vanguard S&P 500 ETF (VOO). By examining their key features, performance, and expenses, you can determine which of these exchange-traded funds deserves a place in your investment portfolio.
The VTI ETF seeks to track the performance of the CRSP US Total Market Index, which includes all investable U.S. stocks. On the other hand, the VOO ETF aims to replicate the performance of the S&P 500 Index, which consists of 500 of the largest U.S. companies. Both funds offer exposure to a broad range of U.S. equities, but their underlying indexes differ in composition.
When comparing VTI vs VOO ETF, it's important to consider their expense ratios. VTI has a slightly lower expense ratio of 0.03% compared to VOO's 0.04%. While the difference may seem small, over time, lower fees can have a significant impact on your investment returns.
In terms of performance, both VTI and VOO have delivered strong returns over the years. However, VOO has outperformed VTI in recent years, reflecting the strength of large-cap U.S. stocks in the S&P 500 Index. If you are seeking exposure to the biggest U.S. companies, VOO may be the better choice for you.
Investors looking for a low-cost, broadly diversified U.S. equity ETF may also consider other options beyond VTI and VOO. Here are some other low-cost ETFs that you may have overlooked: the iShares Core S&P 500 ETF (IVV), the Schwab U.S. Broad Market ETF (SCHB), and the SPDR Portfolio S&P 500 ETF (SPLG). Each of these funds offers exposure to the U.S. stock market at a competitive expense ratio.
The S&P 500 is the top stock market benchmark, and investors often look for ETFs that replicate its performance. These three S&P 500 ETFs – VOO, IVV, and SPY – all seek to mimic the index's performance, but there are some small differences that may impact which one you choose.
Overall, the Vanguard S&P 500 ETF (VOO) emerges as the winner in the VTI vs VOO comparison. Both SPY and VOO are highly rated for their ability to accurately represent the large-cap opportunity set while providing investors with a low-cost, diversified investment option.
In a strong month for U.S.-listed ETF inflows, year-to-date inflows have reached almost $600 billion. The SPY ETF led outflows, indicating that investors continue to favor low-cost, passive investment options like the Vanguard S&P 500 ETF (VOO).
In conclusion, if you are looking for broad exposure to the Large Cap Blend segment of the U.S. equity market, the Vanguard S&P 500 ETF (VOO) is a top choice. With its low expense ratio, strong performance, and diversified holdings, VOO deserves a place in your investment portfolio. Whether you are a beginner or experienced investor, VOO offers a simple and effective way to access the U.S. stock market.
Ticker: VOO, VTI
