VT vs VTI: Comparing Total Stock Market ETFs
This article compares VT vs VTI — Vanguard’s Total World Stock Index ETF (exchange-traded fund) to Vanguard’s Total Stock Market Index ETF.
Both are passively managed stock funds popular in retirement accounts.
Index mutual funds and ETFs track market indexes like the S&P 500.
VT and VTI are much broader than the S&P 500. VTI tracks more than 3,700 stocks, and VT nearly three times that.
If you own either fund, you own a tiny piece of nearly all the public companies in the U.S.
VT gives you access to nearly every public company worldwide in one ETF.
Table of Contents
Bottom Line Upfront (BLUF)
Before I get into the details of VT vs VTI, it’s essential to keep the following in mind:
- These are foundational super-funds that DIY investors can use as core holdings for taxable and retirement portfolios.
- VT is an all-world stock fund. VTI is U.S. only. There is significant overlap in holdings (~60%).
- Most investors use VTI plus a separate international fund. Investors use VT to simplify their portfolios into one holding.
- VTI has outperformed VT because U.S. stock markets typically outperform international stock markets.
- All brokerage customers can access these funds. Vanguard customers can own the ETFs or the mutual fund equivalents (see ETFs section).
Please note that both funds update their prospectuses regularly. The information referenced in this article will change over time.
The definitive resource for both funds is Vanguard’s website.
Here are links to Vanguard’s most updated information. Consider the information on those pages to be the authoritative data source.
VT vs VTI Comparison
Side-by-Side
Here’s a side-by-side comparison of both funds. Scroll right on mobile.
A few noticeable differences comparing VTI vs VT:
- VT is roughly 1/10th the size of VTI. VTI is an older fund.
- VTI has consistently outperformed VT.
- VT is a higher-yielding ETF.
Benchmark Indexes
VT is indexed to the FTSE Global All Cap Index.
The FTSE Global All Cap Index is a market-capitalization weighted index representing the performance of large, mid and small cap companies in Developed and Emerging markets. The index is derived from the FTSE Global Equity Index Series (GEIS), which captures 98% of the world’s investable market capitalization.
VTI is indexed to the CRSP U.S. Total Market Index. CRSP stands for the Center for Research in Security Prices, an affiliate of the University of Chicago Booth School of Business.
Visit this page for the latest information about the index.
The index has more than 3,700 constituents, making up nearly all equities in U.S. markets. Vanguard uses several CRSP indexes to build its family of low-cost index funds.
The number of constituents changes frequently, and the holdings do not always perfectly track the index due to frequent modifications. Most modifications involve small holdings and do not impact the overall fund.
The CRSP U.S. Total Market Index is also market-cap-weighted.
VT and VTI holdings reflect the market cap weight of the index.
Performance Chart
The performance of these ETFs diverges due to substantial differences in the underlying assets (total world vs domestic only).
Here is a daily updated VT vs VTI chart showing their relationship over the past ten years. Scroll right on mobile.
VTI has consistently outperformed VT because the U.S. markets have outperformed international markets. Past performance is not indicative of future results.
See the table above for up-to-date three-, five-, and 10-year average annual performance records.
VT Weight Exposure
VTI is 100% invested in U.S. stocks.
VT is an international fund that also includes U.S. stocks. Often, international funds are “ex U.S.”. But not VT.
Therefore, it’s crucial to understand the global allocation. U.S. stocks make up 61% of the total fund. That means VT and VTI overlap by approximately that percentage.
Fund Equivalents
Here are the equivalents for both funds.
The VT mutual fund equivalent is VTWAX, Vanguard’s Total World Stock Index Fund Admiral Shares. Investors could also use VTI + VXUS to achieve a similar investment composition.
The VTI mutual fund equivalent is VTSAX, Vanguard’s Total Stock Market Index Fund Admiral Shares.
The VTI Fidelity equivalent is FSKAX.
The VT Fidelity equivalent is FSKAX + FTIHX, Fidelity’s Total Market Index Fund plus Fidelity’s Total International Index Fund. Fidelity does not have an identical fund. FTIHX uses the MSCI ACWI x US IMI (Net MA), which has about 5,000 international stocks, making this a similar combination but not identical.
Mutual Funds vs ETFs
Exchange-traded funds (ETFs) trade like stocks. You can buy or sell them during the day on a stock exchange.
ETFs are easier to own, have lower minimum investments, and the price changes throughout the day. Mutual funds trade once daily after the market closes.
Active investors typically use ETFs for trading purposes or to buy and hold indexes when they can’t access index mutual funds. Investors should have accounts with the mutual fund administrator if they wish to buy mutual funds and choose ETFs otherwise.
Mutual fund companies like Vanguard make it easy to reinvest dividends and capital gains. Set up dividend reinvestment once, and you’ll never have an idle cash balance.
Conversely, depending on your broker’s dividend reinvestment policy, ETFs may need manual dividend reinvestment. Many online brokers offer free and automated dividend investments.
Here are the dividend reinvestment policies of many of the larger and more popular brokers.
If your account is with Vanguard, you will benefit from using the index fund VT because it makes investing dividends easier. Mutual fund access at non-mutual-fund brokers is often unavailable or involves fees.
Use the above resources to find the most up-to-date information regarding FSKAX and ITOT.
Read more about mutual funds and ETFs.
The Verdict
For Vanguard customers, deciding between VT vs VTI comes down to U.S. stocks vs U.S. stocks PLUS international stocks.
Most investors choose to keep domestic and international funds separate, choosing VTI and a global fund such as VXUS, Vanguard’s Total International Stock ETF.
Owning VT and VTI would be duplicative. The funds overlap by roughly 60% due to the significant holdings in U.S. companies.
If you have a long-term investment horizon (over five years) and want broad U.S. stock market exposure for diversification, you can be comfortable buying VTI alone.
Add a separate international fund, such as VXUS, and control portfolio allocation percentages separately.
Investors who want the ultimate simplicity in their portfolios can choose VT. It holds approximately 60% U.S. stocks, and the top holdings are very similar to other popular index funds, such as VTSAX and FSKAX.
By holding VT, investors will typically underperform the U.S. market as international markets often lag. Past performance is not indicative of future results.
Please reply with your questions regarding VT vs VTI in the comments section below. Also, please include any requests you have for adding more detail to this article.
Additional Resources
Disclosure: The author is long FSKAX, VTSAX, and VTI.
Craig is a former IT professional who left his 19-year career to be a full-time finance writer. A DIY investor since 1995, he started Retire Before Dad in 2013 as a creative outlet to share his investment portfolios. Craig studied Finance at Michigan State University and lives in Northern Virginia with his wife and three children. Read more.
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