VT vs VTI: Comparing Total Stock Market ETFs

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Vanguard vs. Vanguard image. A comparison article analyzing VT vs VTI, Vanguards total U.S. stock market ETF vs Total World stock market. 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.

The funds are excellent for dollar-cost averaging and compounding interest. Use a broker like M1 Finance to optimize the compounding effect by automating dividend reinvestment. 

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. 

Passive index fund managers do not pick stocks. They allocate money to all stocks in the market index to track its performance. Managers receive a small fee to achieve this outcome.

Since most actively managed funds do not beat their target benchmarks, many fiduciary financial planners recommend index funds instead of actively managed funds or individual stocks.

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. 
  • Both ETFs are available to purchase from any online broker. My favorite is M1 Finance.
  • 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 — Side-by-Side Comparison

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. 

VT vs VTI— 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.
The  index has more than 9,500 constituents. The list of constituents updates frequently. 
 
The FTSE Global All Cap Index is market-cap-weighted, meaning the largest holdings comprise a greater percentage of the index and have a greater influence on price fluctuations than smaller companies. 
 

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. 

VT vs VTI Chart — Performance

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 vs VTI — Top Ten Holdings

For the most updated and complete lists, visit the links at the beginning of the article.

As of 05/02/2024
# Symbol Company Weight
1 MSFT Microsoft Corp. 0.03872
2 AAPL Apple Inc. 0.03091
3 NVDA NVIDIA Corp. 0.02655
4 AMZN Amazon.com Inc. 0.0201
5 META Facebook Inc. Class A 0.01328
6 GOOGL Alphabet Inc. Class A 0.01128
7 GOOG Alphabet Inc. Class C 0.00926
8 LLY Eli Lilly & Co. 0.00814
9 BRK-B Berkshire Hathaway 0.00799
10 JPM JPMorgan Chase & Co. 0.00714
WordPress Table

As of 05/02/2024
# Symbol Company Weight
1 MSFT Microsoft Corp. 0.06158
2 AAPL Apple Inc. 0.04956
3 NVDA NVIDIA Corp. 0.04228
4 AMZN Amazon.com Inc. 0.03322
5 META Facebook Inc. Class A 0.02105
6 GOOGL Alphabet Inc. Class A 0.01753
7 BRK-B Berkshire Hathaway 0.01469
8 GOOG Alphabet Inc. Class C 0.01445
9 LLY Eli Lilly & Co. 0.01311
10 AVGO Broadcom Inc. 0.01222
WordPress Table

Learn more about VTI’s top 50 holdings. 

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. 

VTI vs VT country weight exposure pie chart and table.
Source: Vanguard Group

VT vs VTI — 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. 

For example, if you have an investing account with M1 Finance, you’d invest in VT and VTI instead of VTSAX or VTWAX. 

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.

What is the Best Broker for Owning the Total Market ETF if not Vanguard?

Vanguard is an excellent choice for long-term retirement investors. You’re in good hands if your IRA or employer-sponsored plan is with the broker or if you have individual accounts. 

I recommend another broker for a more modern user experience that serves banking, borrowing, and spending needs. 

Long-term investors may prefer an online broker that’s better for dollar cost averaging and dividend reinvestment. 

I’m a big fan of the online brokerage M1 Finance. It’s a reliable and robust, no-fee broker for beginner to intermediate investors. It’s easy to get started.

As your investing skills and portfolio mature, M1 is one of the best platforms to scale.

They also offer an integrated checking account and low borrowing rates. Read my complete M1 Finance review here

M1 Finance does not offer mutual funds. However, Vanguard and other ETFs are plentiful. It’s my favorite online broker for everyday investing. 

The platform is more intuitive than old-school brokers because it’s built on a modern technology platform.

You create portfolio “pies” that contain all the stocks and ETFs you want to own and in what percentages. Simply add an ETF to a pie and add funds to your account. 

Learn More about M1 Finance

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. The opinions expressed are solely those of the authors and do not reflect the views of M1. They are for informational purposes only and are not a recommendation of an investment strategy or to buy or sell any security in any account. They are also not research reports and are not intended to serve as the basis for any investment decision. Prior to making any investment decision, you are encouraged to consult your personal investment, legal, and tax advisors.


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