VOO vs VTI: What Is the Difference?

The Complete Answer

VOO and VTI are two of the most popular ETFs in the world, both from Vanguard, and both excellent choices for beginners. The key difference is scope: VOO tracks the S&P 500 index of 500 large US companies, while VTI tracks the CRSP US Total Market Index of approximately 3,700 companies.

VTI includes everything in VOO plus mid-cap and small-cap stocks. In practice, this means VTI gives you about 20% exposure to mid-cap and small-cap companies that VOO does not hold. Small and mid-cap stocks have historically offered slightly higher returns over very long periods, though with more volatility.

Despite this difference, the two ETFs are remarkably similar in performance. Their returns over any given year typically differ by less than 0.5%. This is because the S&P 500 represents about 80% of the total US market by value, so even VTI is dominated by the same large companies.

Both charge the same ultra-low expense ratio of 0.03%. Both are enormous funds with hundreds of billions in assets. Both pay quarterly dividends with similar yields. For all practical purposes, you cannot go wrong with either one.

If forced to choose, VTI has a slight theoretical advantage from broader diversification and exposure to the small-cap premium. But VOO has the advantage of tracking the most widely known and followed index in the world. Many advisors recommend VTI for a taxable account (broader diversification) and VOO for a retirement account (simplicity). Ultimately, the difference is so small that consistency of investing matters far more than which one you pick.