Is it better to invest in VTI or VOO?
If you only want to own the biggest and safest companies, choose VOO. If you want broader exposure and more diversification, choose VTI. Or, you could also invest in both, for example, by putting half in VOO and half in VTI.
VOO and VTI are both solid options for a 100% US-based index fund, with low expense ratios and returns that track market returns. The main difference between VOO and VTI is the number of holdings, with VOO following the S&P 500 and VTI holding virtually every publicly traded company in the US.
Generally, ETFs will have a slight edge from a tax efficiency perspective. ETFs tend to distribute comparatively fewer capital gains to shareholders – these same gains are simply more challenging to manage efficiently from a mutual fund. Overall, VOO and VTI are considered to have the same level of tax efficiency.
NYSEMKT: VTI
The real story here is that this highly diversified ETF is a great starting point for new investors and can be used as a foundation for growth both in your portfolio and in your investment knowledge.
Vanguard S&P 500 ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, VOO is a great option for investors seeking exposure to the Style Box - Large Cap Blend segment of the market.
VTI is the US full market (3000 companies), VOO is just the top 500 companies. However, VOO still makes up about 80% of VTI's market cap. So it isn't worth selling. If you want to switch, just put all new money in VTI.
Average Return
Over the past 10 years, VOO has had annualized average returns of 12.29% , compared to 11.65% for VTI. These numbers are adjusted for stock splits and include dividends.
Or, you could also invest in both, for example, by putting half in VOO and half in VTI. Here's a summary of which one to choose: 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.
Investing in the S&P 500 index fund, such as VOO, is a winning long-term strategy. Historical data shows that the market has consistently gone higher despite obstacles and downturns.
Since its inception over 20 years ago in 2001, VTI has returned 8.1% on an annualized basis, making this fund a consistent long-term performer.
What will VTI be worth in 10 years?
According to the latest long-term forecast, Vanguard Total Fund VTI price will hit $250 by the end of 2024 and then $300 by the middle of 2025. Vanguard Total Fund VTI will rise to $350 within the year of 2027, $400 in 2028, $450 in 2029, $500 in 2030 and $600 in 2034.
The performance of an investment option is often one of the most critical aspects investors consider. The performance of these two ETFs will be highly dependent on the performance of the information technology sector. If information technology significantly outperforms other sectors, then QQQ will outperform VOO.
Vanguard Total Stock Market ETF offers advantages over the S&P 500 index due to its inclusion of mid and small-cap companies. VTI provides exposure to higher growth potential at a potentially lower valuation compared to the S&P 500 index.
VTI - Dividend Comparison. VOO's dividend yield for the trailing twelve months is around 1.41%, less than VTI's 1.44% yield.
VTI is a total U.S. market fund and holds more than 3,500 stocks. VTI is better diversified and benefits from small and mid-cap stocks that grow into large caps. VOO is less diversified, tracking the performance of the S&P 500 Index. VOO excludes small and mid-cap stocks.
The S&P 500 simply reflects the market composition. In the long run, the funds' broad diversification, low turnover, and low fees outweigh these risks.” While the two ETFs follow the same strategy, they earn different ratings. VOO earns a top rating of Gold, while SPY earns the next best rating of Silver.
Roth IRAs allow you to avoid paying taxes on investment returns by investing after-tax income now. VTI and SPAB are good options for your starting stock and bond funds, and are likely to be representative of the kinds of funds offered by Edward Jones.
VOO tracks the S&P 500 Index, while VTI tracks the CRSP US Total Market Index. This makes them sufficiently differentiated in the eyes of the IRS, even though VTI has a 0.99 correlation to VOO.
VOO - Performance Comparison. In the year-to-date period, VTI achieves a 3.74% return, which is significantly lower than VOO's 4.52% return. Over the past 10 years, VTI has underperformed VOO with an annualized return of 11.62%, while VOO has yielded a comparatively higher 12.27% annualized return.
VTI Dividend Information
VTI has a dividend yield of 1.44% and paid $3.54 per share in the past year. The dividend is paid every three months and the last ex-dividend date was Mar 22, 2024.
How much does VTI grow every year?
As of February 2024, VTI has a one-year return of 19.2% with a five-year return of 13.4%. 1 This ETF reflects the larger universe of U.S. equities in a low-cost single fund.
VOO, with its focus on large-cap stocks, may offer more stability, but it also means potentially missing out on the growth offered by smaller companies included in VTI. Conversely, VTI's broader exposure includes more volatile small and mid-cap stocks.
Before purchasing an ETF there are five factors to take into account 1) performance of the ETF 2) the underlying index of the ETF 3) the ETF's structure 4) when and how to trade the ETF and 5) the total cost of the ETF.
Over 3,800 Holdings
As alluded to above, VTI holds an incredible 3,837 stocks, making it incredibly diversified. Furthermore, its top 10 holdings make up just 25.9% of the fund, adding to this diversification.
Two funds that have outperformed the S&P 500 and more than doubled in value in the past five years are the Invesco QQQ Trust (NASDAQ: QQQ) and the Vanguard Growth ETF (NYSEMKT: VUG). Here's a look at why these funds have done so well, and whether you should consider adding them to your portfolio.
