We Compare VTI vs ITOT:
We are going to explore the difference between Vanguard Total Stock Market ETF (VTI) vs iShares Core S&P Total U.S. Stock Market ETF (ITOT)
Choosing between two funds can be difficult, but I will make it easy to decide between VTI vs ITOT.
VTI vs ITOT
The primary difference between VTI and ITOT is the company that offers the exchange-traded fund (ETF). ITOT is offered by iShares, while Vanguard offers VTI.
They also track different indexes. For example, ITOT tracks the S&P Total Market Index, while VTI tracks the CRSP US Total Market Index.
Another significant difference is the number of stocks in each, with VTI having 4,091 companies in the index compared to 3,629 with ITOT.
iShares offers ITOT.
Vanguard offers VTI.
VTI and ITOT have the same expense ratio of 0.03%, making them low-cost ETFs.
ITOT
- Fund Inception: 2004
- Offered By iShares
- Tracks S&P Total Market Index
- Expense Ratio 0.03%
- Number Of Stocks: 3,629
VTI
- Fund Inception: 2000
- Offered By Vanguard
- Tracks the CRSP US Total Market Index
- Expense Ratio: 0.03%
- Number Of Stocks: 4,091
- Admiral Shares (VTSAX)
VTI vs ITOT Performance
Vanguard's VTI and ITOT have identical performance returns over the last 10 years, with VTI and ITOT returning 14.35% annually.
Here is how their performance compares:
Here is another comparison of short-term performance:
Again, as you can see, they have performed the same over the short and long term.
This performance is because they both aim to have the same market exposure.
VTI vs ITOT Holdings
There is a significant difference in the number of holdings for ITOT and VTI. ITOT includes 3,629 stocks in the ETF, while VTI holds 4,091 stocks.
VTI holds more companies compared to ITOT.
Both funds have the same sector diversification. ITOT is 29% technology which is the same as VTI.
However, VTI has slightly more diversification due to its 4,091 holdings compared to only 3,629 with ITOT.
VTI and ITOT's top 10 holdings make up 23% of their assets.
Here are VTI and ITOT holdings side-by-side:
The only difference between ITOT and VTI's top 10 holdings is the weight of their holdings.
For example, Apple makes up slightly more of VTI compared to ITOT.
VTI vs ITOT Overlap
There is an overlap between VTI and ITOT that includes 3,357 stocks. Almost all of the holdings in ITOT are in VTI. However, only 91% of VTI's holdings are in ITOT.
Here are VTI and ITOT holdings overlap:
This overlap means VTI includes most holdings in ITOT and many more holdings.
VTI has more diversification compared to ITOT.
VTI and ITOT Differences
The main difference between VTI and ITOT is the company that offers the fund. ITOT is offered by iShares, while Vanguard offers VTI.
They also differ in the number of holdings. VTI holds 4,091 stocks, while ITOT holds 3,629 stocks making it smaller than VTI.
Lastly, VTI provides more liquidity with $1.3 trillion in net assets compared to $43 billion with ITOT.
By investing in an ETF with more holdings, you are helping diversify your portfolio and minimize risk.
Differences between VTI and ITOT:
- Brokerage (VTI is Vanguard, ITOT is iShares)
- Different Number Of Holdings (4,091 vs 3,629)
- Liquidity
- Tracking Index
ITOT Description
- Fund Inception: 2004
- Offered By iShares
- Tracks S&P Total Market Index
- Expense Ratio 0.03%
- Number Of Stocks: 3629
The iShares Core S&P Total U.S. Stock Market ETF (ITOT) was launched in 2004 and tracks the S&P Total Market Index.
ITOT passively manages to give investors broad exposure to the U.S. equity market. Equities include large, mid, and small-cap companies.
It has over $43 billion, making it one of the largest ETFs to track the total U.S. equity market.
Large, mid, and small-cap companies provide more diversification. More diversification translates into less risk for investors.
ITOT Performance
ITOT closely monitors and seeks to replicate the performance of its underlying index, which is the S&P Total Market Index.
This has resulted in excellent performance returns over the last 10 years:
In addition, the ETF gives investors access to over 2500 of the most prominent publicly-traded companies in the United States with diversification into all market capitalizations.
As you can see, ITOT has performed well since its inception in 2004.
The ETF has a beta of 1.04 and a standard deviation of 18.50% for the trailing three-year period. This makes ITOT a medium-risk choice in its class.
The fund has roughly 3,629 holdings.
iShares Core S&P Total U.S. Stock Market ETF may be a good option for investors looking for total U.S. market exposure.
These include expense ratio, expected asset class return, and momentum.
ITOT Costs
Cost is one of the many vital factors to consider in choosing an ETF. To analyze the cost of an ETF, you should look at the expense ratio.
Cheaper funds tend to yield higher profits since they spend less on management.
ITOT is one of the cheapest exchange-traded funds, with an expense ratio of 0.03%.
In other words, for a $10,000 investment, the ETF charges you $3 for annual operating expenses.
ITOT Holdings
The top 10 holdings for ITOT make up 23% of its total assets.
iShare's ITOT comprises Apple, Microsoft, Amazon, Alphabet, and Tesla and provides exposure to over 2,000 stocks.
If you are looking for a fund similar to ITOT, you can look at the Schwab Total Stock Market Index Fund (SWTSX).
No Minimum Investment
ITOT and VTI are exchange-traded funds (ETFs), so there is no minimum investment. Investors looking to buy fractional shares can use platforms like M1 Finance.
Typically, fractional shares are not available for ETFs, but with M1 Finance, you can purchase fractional shares with no commission.
Buying fractional shares allows you to maximize your investment. This is great for shares of VTI due to its high prices per share.
There are two easy ways to invest in VTI or ITOT commission-free.
- Vanguard to invest in VTI or iShares for ITOT
- M1 Finance to invest in either VTI or ITOT. (Use this link for $50 when you open a new account)
Both of these options are free. This is important because fees can lower our returns.
M1 Finance is the best option because it allows you to purchase VTI, ITOT, and thousands of other stocks.
I also use Personal Capital to track my investment fees. They have a free Retirement Fee Analyzer that tells you the future impact of fees on your portfolio.
Personal Capital's free tools allow you to quickly find which of your investments has high fees so you can switch them to low-cost options. (Get a $20 Amazon Gift Card with this link when you add at least one investment account containing a balance of more than $1,000 within 30 days)
VTI Description
- Fund Inception: 2000
- Tracks the CRSP US Total Market Index
- Expense Ratio: 0.03%
- Vanguard ETF
- No Minimum Investment
- Number Of Stocks: 4,091
- Admiral Shares (VTSAX)
Vanguard Total Stock Market ETF (VTI) represents nearly 100% of the U.S. equity market. It also tracks the CRSP U.S. Total Market Index.
Vanguard's VTI has an expense ratio of 0.03%.
This implies that the fund has limited exposure to several international stocks.
Yet, this does not affect the companies represented in the fund. Moreover, these stocks have a significant international presence.
VTI Performance
Vanguard Total Stock Market ETF (VTI) is famous for many reasons, of which consistent returns are a significant part.
Its risk level is similar to that of the S&P 500.
VTI Holdings
Vanguard's VTI comprises Apple, Microsoft, Google, Amazon, and Tesla and provides exposure to over 3,500 stocks.
Here are the top 10 holdings for VTI:
Major sectors in the index include:
- Technology
- Healthcare
- Consumer Services
- Financials
- Industrials
The top 10 holdings make up 25% of its total net assets.
Which Is Better ITOT or VTI?
ITOT and VTI are similar investments. They have had the same performance over the last 10 years and have the same expense ratio of 0.03%.
VTI offers more diversification and less volatility since it holds more stocks.
Which is better will likely depend on which brokerage you prefer to use.
Vanguard customers will likely prefer VTI.
Blackrock or iShares customers will probably select ITOT.
That said, slight differences could make VTI better for some investors.
VTI has more diversification and less volatility. It also offers more liquidity, with $1.3 trillion in net assets.
It's important to consider costs and fees because they can cost you in the long run. That's why buying and selling your shares commission-free is essential.
Again a great way to do this is with M1 Finance.
You can purchase fractional shares for free, allowing you to buy VTI, ITOT, and thousands of other stocks/ETFs.
Is VTI or ITOT Better for Financial Independence?
VTI and ITOT have performed well enough to get you to Financial Independence Retire Early (FIRE). They have performed excellently over the last 10 years and have low expense ratios.
Calculate Your FI Number With My Free FIRE Calculator
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Being part of the FIRE community, we aim for the lowest fees possible and are big fans of Vanguard.
For those reasons, I prefer VTI over ITOT.
Related Posts:
My Winner: VTI
My winner is VTI based on the higher diversification and the fact that I love Vanguard.
Vanguard's VTI offers:
- Diversification
- Low Fees
- Vanguard Fund
Low fees are a guaranteed way to keep more money in your portfolio!
I would also suggest considering VTI's Admiral fund VTSAX.