Investors have thousands of options when it comes to investing in exchange-traded funds, including those that mirror broad U.S. stock market indexes like the S&P 500 Index.
Here's a look at key differences between the Vanguard S&P 500 ETF VOO and the Vanguard Total Stock Market ETF VTI.
VOO ETF Vs. VTI ETF: The Vanguard S&P 500 ETF tracks the S&P 500 Index and holds around 500 stocks, with a current large weighting of the Magnificent Seven stocks.
The Vanguard Total Stock Market ETF tracks the CRSP U.S. Total Market Index and holds 3,674 stocks at the time of writing.
The VOO is weighted by market capitalization for the 500 largest U.S. public companies, while the VTI includes stocks outside the S&P 500.
Here are the top 10 holdings of the two ETFs:
| VOO Top 10 Holdings, Fund Weighting | VTI Top 10 Holdings, Fund Weighting |
| Microsoft (MSFT), 7.2% | Microsoft (MSFT), 6.3% |
| NVIDIA (NVDA), 6.6% | Apple (AAPL), 5.9% |
| Apple (AAPL), 6.6% | NVIDIA (NVDA), 5.5% |
| Amazon (AMZN), 3.9% | Amazon (AMZN), 3.5% |
| Meta Platforms (META), 2.4% | Meta Platforms (META), 2.1% |
| Alphabet Class A (GOOGL), 2.3% | Alphabet Class A (GOOGL), 2.1% |
| Alphabet Class C (GOOG), 2.0% | Alphabet Class C (GOOG), 1.7% |
| Berkshire Hathaway (BRK.B), 1.6% | Eli Lilly (LLY), 1.5% |
| Eli Lilly (LLY), 1.6% | Broadcom (AVGO), 1.4% |
| Broadcom (AVGO), 1.5% | Berkshire Hathaway (BRK.B), 1.4% |
As investors can see, the top 10 holdings are the same across both funds. The difference is the weighting, with the VOO more heavily concentrated among its top 10 holdings and VTI holding smaller weightings due to the larger amount of overall holdings in the fund.
The top sectors represented by the VOO ETF are:
- Information Technology (32.5%)
- Financials (12.4%)
- Health Care (11.7%).
Compare that to the VTI ETF, which has the largest weighting for:
- Technology (35.2%)
- Consumer Discretionary (13.8%) and
- Industrials (12.1%).
Each of the two Vanguard ETFs has an expense ratio of 0.03%, which is on the lower side for ETFs and is cheaper than the 0.09% expense rate for the SPDR S&P 500 ETF Trust SPY, which also tracks the S&P 500 ETF Trust and trades similar to VOO.
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ETF Performance: With different indexes tracked and holdings, the ETFs have turned in different performances over the years.
Here's a look at the current performances of VOO vs. VTI and how the two ETFs stack up against SPY, which is one of the largest ETFs and the first U.S. ETF to ever launch, back in 1993.
| VOO | VTI | SPY | |
| Year-to-Date Return | +12.2% | +11.0% | +12.2% |
| 1-Year Return | +19.7% | +18.2% | +19.6% |
| 5-Year Return | +85.2% | +79.2% | +85.1% |
| 10-Year Return | +173.1% | +155.0% | +167.7% |
The Vanguard S&P 500 ETF has slightly outperformed the SPDR S&P 500 ETF Trust, likely the result of rebalancing timing and asset weighting. The ETF has also outperformed the Vanguard Total Stock Market ETF with large-cap stocks performing better than the overall market index based on the time periods above.
For investors, the main consideration between VOO and VTI is how much exposure to large-cap stocks versus all the stock sizes offered on stock exchanges.
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© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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