We Compare VTI vs SPY:
Vanguard Total Stock Market ETF (VTI) vs SPDR S&P 500 ETF Trust (SPY)
Choosing between two great investment options, VTI vs SPY, can be difficult. They are both great funds and popular among investors.
Vanguard Total Stock Market ETF, VTI, has become a favorite of the FIRE community and has over $1 trillion in total net assets.
SPDR S&P 500 ETF Trust, SPY, invests in 500 of the largest companies in the United States and accounts for about three-quarters of the U.S. stock market's value.
I'll help break down their differences.
VTI vs SPY
The primary difference between VTI and SPY is the brokerage that issues the fund. VTI is a Vanguard fund, while SPY is a fund from State Street Global Advisors Trust Company.
VTI is a Vanguard fund
SPY is a State Street Global Advisors Trust Company fund
Another significant difference is the index these funds track.
VTI tracks the CRSP US Total Market Index
SPY tracks the S&P 500 Index
Vanguard's VTI is a total market exchange-traded fund (ETF) that includes 80% SPY, while the other 20% is a mixture of small to mid-cap stocks.
Both funds are incredibly popular with long-term investors.
VTI
- Fund Inception: 2000
- Tracks the CRSP US Total Market Index
- Expense Ratio: 0.03%
- Vanguard ETF
- No Minimum Investment
- Number Of Stocks: 3,535
- Admiral Shares (VTSAX)
SPY
- Fund Inception: 1993
- Tracks the S&P 500 Index
- Expense Ratio: 0.09%
- State Street Fund
- Number Of Stocks: 506
- Top 10 Holdings: 28%
- Yield 1.20%
- Similar ETF (VOO)
VTI and SPY have low expense ratios; however, VTI's expense ratio is lower than SPY's.
VTI expense ratio is 0.03%
SPY expense ratio is 0.09%
Lastly, SPY and VTI are exchange-traded funds (ETFs); therefore, they trade intraday until the markets close.
VTI vs SPY Performance
VTI and SPY have had similar performance returns over the last 10 years. The difference in performance returns is only 0.38% annually over 10 years.
As you can see, the long-term performance for VTI and SPY is similar.
VTI vs SPY Chart
SPY has slightly outperformed VTI over the short term:
Over the last year, SPY has outperformed VTI by 5%.
VTI vs SPY Expense Ratio
The difference in expense ratio between VTI and SPY is only 0.06%. Vanguard's VTI has an expense ratio of 0.03%, while SPY has an expense ratio of 0.09%.
Example:
Assuming you start with an initial investment of $100,000 and contribute $10,000 yearly over 30 years.
You will have $50,000 less in your account because of the extra 0.06% expense ratio.
This difference for a long-term investor could be considered significant.
Winner: VTI with the lowest expense ratio of 0.03%
What Is The Difference Between VTI and SPY?
The main difference between VTI and SPY is the brokerage that issues the fund. For example, Vanguard issued VTI, while State Street Global Advisors Trust Company issued SPY.
They also differ in the index they track.
VTI tracks the CRSP US Total Market Index. SPY tracks the S&P 500 Index.
Lastly, VTI and SPY have different expense ratios. VTI has a lower expense ratio of 0.03%. SPY has an expense ratio of 0.09%.
No Minimum Investment
VTI and SPY are exchange-traded funds (ETFs), so there is no minimum investment.
The only requirement is the need to purchase at least one full share.
Usually, fractional shares are unavailable for ETFs unless you use M1 Finance. ***(Get $50 When You Use This Link)***
M1 Finance allows you to purchase fractional shares with no commission.
Buying fractional shares allows you to maximize your investment. You won't have to keep your money idle until you have enough to purchase a full share.
This is especially beneficial when buying SPY because of its high share price.
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 easily 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 Profile
- Fund Inception: 2000
- Tracks the CRSP US Total Market Index
- Expense Ratio: 0.03%
- Vanguard ETF
- No Minimum Investment
- Number Of Stocks: 3,535
- Admiral Shares (VTSAX)
Vanguard Total Stock Market ETF (VTI) represents close to 100% of the U.S. equity market that is publicly traded. It also tracks the CRSP U.S. Total Market Index.
Vanguard's VTI has an expense ratio of 0.03%.
This notably implies that the fund has limited exposure to several international stocks.
However, this does not affect the companies represented in the fund. These stocks have a significant international presence.
VTI Performance
Vanguard Total Stock Market ETF (VTI) is popular 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 is largely made up of Apple, Microsoft, Google, Amazon, and Tesla and provides exposure to over 3500 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.
SPY Profile
- Fund Inception: 1993
- Tracks the S&P 500 Index
- Expense Ratio: 0.09%
- Number Of Stocks: 506
- Top 10 Holdings: 28%
- Yield 1.20%
SPDR S&P 500 ETF Trust (SPY) tracks the Standard & Poor's 500 Index (S&P 500).
SPY was created in 1993, making it the first exchange-traded fund listed in the U.S. SPY is also one of the most popular ETF funds available.
It has an expense ratio of 0.09% and offers exposure to over 500 stocks.
The SPDR S&P 500 ETF Trust (SPY) is considered a large blend ETF and tracks a market-cap-weighted index of large and mid-cap stocks.
The S&P Committee selects these stocks.
SPY Performance
Over the last 10 years, SPY has had an average return of 15% annually. This is almost the same as the performance of the S&P 500 over the same time frame.
SPY's goal is to mirror the results of the S&P 500 index.
Here is the growth of $10,000 over 10 years with SPY:
SPY Holdings
The top 10 holdings for SPY make up 28% of its total assets.
These are the top 10 holdings for SPY:
SPDR S&P 500 ETF Trust (SPY) is largely made up of Apple, Microsoft, Amazon, Google, and Tesla.
However, it also provides exposure to over 500 other stocks.
Which Is Better VTI vs SPY?
VTI and SPY are both excellent investments depending on your investment goals. They both have a history of outstanding performance returns and are low-cost ETFs.
The answer to which ETF is better depends on your investing goals and the brokerage you prefer to use.
Here are some advantages of both of them:
VTI Advantages:
- Vanguard Brokerage (Investor Owned)
- Lower Expense Ratio
- Increased Diversification (More Holdings)
SPY Advantages:
- Long History Of Strong Performance
- Low Expense Ratio
VTI and SPY can be great investment options, and both can get you to Financial Independence Retire Early (FIRE).
They both have super-low expense ratios (0.03% vs 0.09%). Therefore, either option is a great investment for financial independence.
After keeping fees to a minimum, you can work on increasing your savings rate and prioritizing your investments.
Then, you will be well on your way to Financial Independence and Early Retirement!
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My Winner: VTI
SPY and VTI can be great long-term investments. This is because they both have a similar return on investment.
However, commissions and fees can add up over the long term.
So, for those reasons, I prefer VTI.
VTI is lower cost and more diversified compared to SPY.
VTI also has higher liquidity with over $1 trillion in total net assets compared to $408 billion with SPY.
If you already have a Vanguard account, it makes sense to go with VTI for the ability to purchase the ETF commission-free.
You can also use M1 Finance. (Use this link for a $50 Bonus)
Vanguard also has the lowest fees and best index funds available overall.
I chose to invest in VTI instead of SPY because of the increased diversification and lower expense ratio.
You should consider your investment goals when deciding between the two funds.