This is a thorough comparison of VTIAX vs VTSAX and the conclusion of which admiral fund is better for you.
Exploring the difference between Vanguard Total International Stock Index Fund Admiral Shares (VTIAX) and Vanguard Total Stock Market Index Fund (VTSAX) will provide more clarity when investing.
I also share how you can start taking advantage of these two funds by investing in the equivalent exchange-traded funds (ETFs), buying fractional shares, or getting started with investor shares.
VTIAX vs VTSAX
The primary difference between VTIAX and VTSAX is the index they track. VTIAX tracks the Spliced Total International Stock Index, while VTSAX tracks the CRSP U.S. Total Market Index.
VTIAX tracks the Spliced Total International Stock Index
VTSAX tracks the CRSP U.S. Total Market Index
Vanguard Total International Stock Index Fund Admiral Shares (VTIAX) invests in international stocks, including developed and emerging markets.
Vanguard Total Stock Market Index Fund Admiral Shares (VTSAX) provides investors with exposure to the entire United States equity market.
The U.S. equity market includes small, mid, and large-cap growth and value stocks.
Essentially, VTSAX only holds U.S. stocks, while VTIAX holds only international stocks.
VTIAX
- Tracks Spliced Total International Stock Index
- Minimum Investment: $3,000
- Expense Ratio: 0.11%
- Number Of Stocks: 7,717
VTSAX
- Tracks CRSP U.S. Total Market Index
- Minimum Investment: $3,000
- Expense Ratio: 0.04%
- Number Of Stocks: 3,535
Another significant difference is the number of stocks in each, with VTIAX having 7,717 different companies in the index compared to 3,535 with VTSAX.
However, VTSAX has a lower expense ratio of 0.04% compared to 0.11% with VTIAX. That makes VTIAX more than twice as expensive as VTSAX.
VTSAX vs VTIAX Performance
VTSAX and VTIAX have performed differently over the last 10 years, with VTSAX beating VTIAX by 8.39% annually.
Here is how their performance compares:
As you can see, VTSAX has significantly outperformed VTIAX over the last 10 years.
VTIAX vs VTSAX Expense Ratio
The difference in expense ratio between VTIAX vs VTSAX is only 0.07%. VTSAX has an expense ratio of 0.04%, while VTIAX has an expense ratio of 0.11%.
This can significantly impact your portfolio costs over the long term.
Example:
Assuming you start with an initial investment of $100,000 and contribute $10,000 yearly over 30 years.
Your account will have $57,000 less because of the extra 0.07% expense ratio.
This difference for a long-term investor could be considered significant.
Winner: VTSAX with the lowest expense ratio of 0.04%
VTSAX and VTIAX Minimum Investment
For a first-time investment in VTSAX and VTIAX, you need to have a minimum of $3,000.
After that, you are at liberty to invest any amount you want.
This might be a barrier to starting your investing journey as a first-time investor.
Alternatively, you can invest in the exchange-traded fund (ETF) equivalent of these admiral funds.
The ETF equivalent for these admiral funds are:
VTSAX = VTI
VTIAX = VXUS
You only need to have the price of one share as a minimum investment. For example, if VTI's share price is $50, you can invest in the fund for as little as $50.
So if you are starting small, your best choice might be to start with an ETF equivalent and then switch once you reach the $3,000 minimum.
Alternatively, you could invest with no minimum requirement into VTSAX's ETF equivalent, VTI, through the Vanguard platform or M1 Finance. (Use this link for a $50 Bonus)
What Is The Difference Between VTSAX and VTIAX?
The main difference between VTSAX and VTIAX is their holdings. VTSAX holds only US-based companies, while VTIAX holds only international companies. This means they have no overlapping holdings.
VTSAX and VTIAX also differ in the number of holdings in each fund. VTIAX holds twice as many stocks compared to VTSAX.
By investing in a fund with more holdings, you are helping diversify your portfolio and minimize risk.
Differences between VTSAX and VTIAX:
- Different Number Of Holdings (~3535 vs ~7717)
- Asset Allocation
- Tracking Index
- Expense Ratio (0.04% vs 0.11%)
VTIAX Profile
- Fund Inception: 2010
- Tracks the Spliced Total International Stock Index
- Expense Ratio: 0.11%
- Vanguard Fund
- Minimum Initial Investment: $3,000
- Number Of Stocks: 7717
- Equivalent ETF (VXUS)
Vanguard Total International Stock Index Fund Admiral Shares (VTIAX) is an easy way to gain exposure to international equities, including developed and emerging markets. It also tracks the Spliced Total International Stock Index.
Vanguard's VTIAX has an expense ratio of 0.11%.
This fund excludes US-based equities. Therefore, it has an asset allocation that is 100% international stocks.
However, these international companies do significant business in the states.
VTIAX Performance
Vanguard Total International Stock Index Fund Admiral Shares (VTIAX) is popular as an additional fund to complement a US-centric fund.
This is because, historically, international funds have underperformed the U.S. market.
However, past performance does not predict future returns.
Here is the performance of VTIAX over the last 10 years:
Here is how VTIAX compares to the S&P 500 Index:
As you can see, VTIAX has significantly underperformed the S&P 500 Index over the last 10 years.
VTIAX Holdings
Vanguard's VTIAX comprises Taiwan Semiconductor Manufacturing, Tencent, Nestle, Samsung Electronics, and Roche but it also provides exposure to over 7,000 stocks.
Here are the top 10 holdings for VTIAX:
Major regions in the index include:
- Emerging Markets
- Europe
- Pacific
- Middle East
- North America (excluding the U.S.)
The top 10 holdings make up 10% of its total net assets.
VTSAX Profile
- Fund Inception: 2000
- Tracks the CRSP US Total Market Index
- Expense Ratio: 0.04%
- Vanguard Fund
- Minimum Initial Investment: $3,000
- Number Of Stocks: 3,535
- Equivalent ETF (VTI)
Vanguard Total Stock Market Index Fund Admiral Shares (VTSAX) represent 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 VTSAX has an expense ratio of 0.04%.
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.
VTSAX Performance
Vanguard Total Stock Market Index Fund Admiral Shares (VTSAX) 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.
VTSAX Holdings
Vanguard's VTSAX comprises Apple, Microsoft, Google, Amazon, and Tesla and provides exposure to over 3,500 stocks.
Here are the top 10 holdings for VTSAX:
Major sectors in the index include:
- Healthcare
- Technology
- Consumer Services
- Financials
- Industrials
The top 10 holdings make up 25% of its total net assets.
VTSAX/VTIAX Allocation
Many investors want to know what is the best VTSAX/VTIAX allocation. Vanguard uses a VTSAX/VTIAX allocation of 60/40 split with its Total World Stock Index Fund Admiral Shares (VTWAX).
Fidelity chooses an allocation of 70/30 for its world funds.
The founder of Vanguard, John Bogle, didn't recommend any international holdings, but if you disagree, he would say limit international to 20%.
No one knows if the U.S. or International will outperform over the next 30 years.
Many will argue that VTSAX does have international exposure because U.S. companies do so much international business.
The “right” VTSAX/VTIAX allocation will be your preference.
If you believe globalization provides international exposure, you might be comfortable with 100% U.S. stocks.
Advice on international exposure generally ranges from 0% to 40%.
Ultimately, this will be your choice as an investor.
Related Posts:
VTIAX vs VTSAX In a Roth IRA
Many investors will hold VTSAX in a Roth IRA and keep VTIAX in a taxable account. Having international funds in a taxable account allows you to claim the foreign tax credit annually.
It's also smart to hold bonds or REITS in tax-advantaged accounts.
The high dividend payouts can cause a tax drag on your portfolio.
My Winner: BOTH
VTIAX and VTSAX can be excellent long-term investments, and they both can have a spot in an investor's portfolio.
Both admiral funds are very low cost, keeping more money in your portfolio.
They also have significant diversification, with thousands of stock holdings each.
If you are comfortable with 100% U.S. stocks, VTSAX can be a great choice and is a favorite in the FIRE community.
However, if you want international diversification, you can pair VTIAX with VTSAX until you reach the perfect VTIAX/VTSAX allocation.
If the minimum investment is an issue, you can always invest in their equivalent ETFs using Vanguard or M1 Finance. (Use this link for a $50 Bonus)
Lastly, Vanguard has the lowest fees and best index funds available overall.
You should consider your investment goals when deciding between the two funds.