VOO vs. VTI — ETF Comparison - Stock Analysis (2024)

FAQs

VOO vs. VTI — ETF Comparison - Stock Analysis? ›

VTI vs VOO: Risk and return

VTI and VOO have similar performance metrics. VOO has outperformed VTI slightly over the last 10 years, but the gap has widened recently. As noted, the outperformance comes from VOO's larger positions in mega cap tech stocks.

Similar Yet Distinct: While both VOO and VTI are low-cost, broadly diversified ETFs from Vanguard, VOO tracks the S&P 500, focusing on large-cap stocks, whereas VTI tracks the CRSP US Total Market Index, encompassing a wider range of stocks including small and mid-cap companies.

Since VTI and VOO are both ETFs, they have the same trading and liquidity, tax efficiency, and tax-loss harvesting rules. There are two key differences between VOO and VTI: the diversification strategy and performance. VOO invests in approximately 500 stocks, while VTI invests in over 3,500.

Summary. Many investors believe they are well-diversified by owning a large number of stocks, but this is not necessarily true. The Vanguard Total Stock Market Index Fund ETF owns over 3,700 stocks, which is excessive and redundant.

VOO has a consensus rating of Moderate Buy which is based on 404 buy ratings, 95 hold ratings and 7 sell ratings. What is VOO's price target? The average price target for VOO is $565.27. This is based on 506 Wall Streets Analysts 12-month price targets, issued in the past 3 months.

Does it make sense to have both VTI and VOO? For most investors, it probably doesn't make sense to own both. VTI and VOO both provide great diversification at a low cost. However, you may find that your retirement plan at work doesn't offer a total stock market index fund like VTI.

To tax-loss harvest, I sell all $80,000 of VOO and lock in a $20,000 tax loss to offset future gains. I then immediately reinvest the $80,000 into another ETF that is not legally “substantially identical” to VOO. In this case, I chose the Vanguard Total Stock Market Index (VTI).

In general, such funds are appropriate for investors who have a long-term investment horizon (ten years or longer), who are seeking growth in capital as a primary objective, and who are prepared to endure the sharp and sometimes prolonged declines in share prices that occur from time to time in the stock market.

Is VOO good for retirement? ›

Expense Ratios And Fees

VOO might be the more economical choice for cost-conscious investors, especially those investing large sums or planning for long-term goals like retirement.

VTI has an advantage with an expense ratio of 0.03% compared to 0.09% of SPY. Another key difference is the performance in annual returns and dividend yield. SPY has a clear advantage in annual returns; it has outperformed VTI by an average of 1% in 8 of the last ten years.

Vanguard S&P 500 ETF

VTI is less expensive with a Total Expense Ratio (TER) of 0.03%, versus 0.03% for VOO. VTI is up 15.74% year-to-date (YTD) with +$19.73B in YTD flows. VOO performs better with 16.94% YTD performance, and +$49.90B in YTD flows.

VTI is an extremely diversified fund. Its large amount of holdings reflect the entire universe of investable U.S. securities. The fund has exposure to small-cap stocks which can be more volatile than mid- or large-cap holdings. The fund has a beta of 1.0 when compared to the larger market.

If you want to own only the biggest and safest stocks, choose VOO. If you want more diversification and exposure to mid-caps and small-caps, choose VTI. If you can't decide, consider simply buying both of them (assuming that commissions are low or free).

VTI has an advantage with an expense ratio of 0.03% compared to 0.09% of SPY. Another key difference is the performance in annual returns and dividend yield. SPY has a clear advantage in annual returns; it has outperformed VTI by an average of 1% in 8 of the last ten years.

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Vanguard Russell 1000 Growth Index Fund (VRGWX)

VRGWX's 10-year average annual return beats the S&P 500's return over the same period.

QQQ is more expensive with a Total Expense Ratio (TER) of 0.2%, versus 0.03% for VTI. QQQ is up 20.05% year-to-date (YTD) with +$22.16B in YTD flows. VTI performs worse with 17.53% YTD performance, and +$17.63B in YTD flows.