VTI vs SPY: Comparing Popular Index ETFs

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State Street Global Advisors logo vs Vanguard logo, representing an analysis of VTI vs SPY.

This article compares VTI vs SPY — Vanguard’s Total Stock Market ETF and State Street’s SPDR® S&P 500 ETF Trust

These are two of the world’s largest and most popular index ETFs.

Both are passively managed index ETFs popular with passive investors looking for near-market returns vs risk-free high-yield savings.

Index ETFs track market indexes, such as the Dow Jones Industrial Average or the Russell 2000. 

VTI is a wide-scoped ETF that tracks the U.S. total stock market as indexed by the CRSP US Total Market Index. It includes small-cap, mid-cap, and large-cap stocks.

SPY tracks the most widely-watched U.S. stock market index: Standard & Poor’s 500 (S&P 500). The S&P 500 contains just over 500 stocks, holding mostly large-caps. 

Both funds are market-cap-weighted, so holdings mirror the companies’ market capitalizations in the indexes. Larger companies represent a higher percentage of the funds, while smaller companies represent a lower holdings percentage.

Passive index ETF managers don’t select stocks; they distribute funds across all benchmark stock holdings to mirror the index performance minus a small fee.

Since most actively managed mutual funds do not beat their target benchmarks, fiduciary financial planners often prefer index funds and ETFs instead of actively managed funds or individual stocks.

Bottom Line Upfront (BLUF)

Before I get into the details of VTI vs SPY, keep the following in mind:

  • Both ETFs are solid, low-fee options for your portfolio. 
  • VTI is a total U.S. market fund that holds more than 3,700 stocks. VTI is better diversified and benefits from small and mid-cap stocks that grow into large caps. 
  • SPY is less diversified and tracks the performance of the S&P 500 Index. SPY excludes small and mid-cap stocks.
  • These funds are quite similar because they are market-cap-weighted ETFs; the top 500 stocks in VTI comprise a high percentage of the fund  (see overlap).  
  • SPY maintains a slight 10-year performance edge as of early 2024 (see performance), but returns are similar due to the market-cap weighting. 
  • Both ETFs are available to purchase from any online broker. I recommend M1 Finance, which is best for dividend investing and dividend reinvestment. 
  • If you have an account with Vanguard or Fidelity, you can own similar mutual funds (see mutual funds).

Please note that both ETFs update their prospectuses regularly. The information referenced in this article will change over time.

The best resource for both funds is the respective company’s websites.

Here are links to the primary resources at Vanguard and State Street. Consider the information in the following links to be the authoritative data sources.

VTI vs SPY — Side-by-Side Comparison

Here’s a side-by-side comparison of both ETFs. Scroll right on mobile.

A few noticeable differences comparing VTI vs SPY:

  • SPY is older and larger. It was the very first U.S. ETF launched in 1993
  • VTI is more diversified with 7X the number of holdings as SPY, but those additional holdings have a low weighting. 
  • SPY’s top ten stocks represent a higher percentage of the fund than VTI. 
  • VTI has a lower expense ratio. 
  • SPY’s performance edges VTI’s over a 3-, 5-, and 10-year investment horizons. Past performance is not indicative of future results. 

VTI and SPY Overlap

As market-cap-weighted ETFs, the top 500 stocks in VTI make up a high percentage of the fund. SPY is also market-cap-weighted but only has 500 stocks. 

There is a significant overlap between the funds.

The top 500 stocks in VTI make up approximately 88% of the ETF’s weighted holdings. The balance of stocks, about 3,200 small and mid-cap stocks, make up the remaining 12% of the ETF’s weighted holdings. 

VTI vs SPY overlap side-by-side pie chart comparison. VTI's largest 500 holdings make up about 88% of VTI's weight. The remaining approximately 3,200 stocks make up only about 12% of weight. Data as of 03/31/2024.
Data sources as of 03/31/2024. Source 1, Source 2

VTI vs SPY — Benchmark Indexes

VTI tracks the CRSP US Total Market Index

CRSP stands for Center for Research in Securities Prices, an affiliate of the University of Chicago. 

Visit this page for the latest information about the index.

The index has more than 3,700 constituents across “mega, mid, small, and micro capitalizations”. The index represents 100% of the U.S. investable equity market.

SPY tracks the S&P 500 Index, one of the most widely-watched stock indexes worldwide.

Visit this page for the latest information about the index.

The S&P 500 Index is a float-adjusted market cap-weighted index, meaning the largest stocks make up a proportionately high percentage of the index, and lower market cap stocks make up a proportionately lower percentage. 

A selection committee of financial market professionals chooses which stocks go into the index. The focus is primarily on large-cap stocks that are representative of the U.S. economy. 

The committee does not try to “pick stocks” for market outperformance. Instead, they look at company size, stock liquidity, share float, and profitability, and it fits the index’s goal to reflect the broad, large-cap marketplace accurately.

VTI vs SPY Chart — Performance

Here is a daily updated chart of a $10,000 investment performance in both VTI vs SPY over ten years. Scroll right on mobile.

This chart shows each stock’s net asset value (NAV) price performance. It does not include dividends, which are subtracted from the NAV when a dividend is paid. 

Past performance is not indicative of future results. 

Though SPY has outperformed VTI over the past ten years, the difference is not significant enough to influence a portfolio. Either fund is a suitable income-producing asset in your portfolio.

See the table above for up-to-date three-, five-, and ten-year average annual performance records.

VTI vs SPY — Dividend Payout Schedules

Both VTI and SPY pay quarterly dividends. 

Investors receive quarterly dividend payments in March, June, September, and December.

View the VTI Dividend History here

VTI vs SPY — Top Ten Holdings

Here are the top ten holdings for each index fund. Visit the links at the beginning of the article for the most updated lists (refresh your browser if the tables don’t load the first time). 

VTI

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

SPY

As of 05/02/2024
# Symbol Company Weight
1 MSFT Microsoft Corp. 0.07097
2 AAPL Apple Inc. 0.0565
3 NVDA NVIDIA Corp. 0.05066
4 AMZN Amazon.com Inc. 0.03743
5 META Facebook Inc. Class A 0.02425
6 GOOGL Alphabet Inc. Class A 0.02019
7 BRK-B Berkshire Hathaway Inc. Class B 0.01737
8 GOOG Alphabet Inc. Class C 0.01705
9 LLY Eli Lilly & Co. 0.01408
10 AVGO Broadcom Inc. 0.01324
WordPress Table

 

Learn more:


Mutual Fund Equivalents

Here are the closest mutual fund equivalents for both ETFs.

The VTI mutual fund equivalent is VTSAX, the Vanguard Total Stock Market Index Fund Admiral Shares. Investors with an account at Vanguard who prefer mutual funds can consider VTSAX as a VTI alternative.

The VTI Fidelity equivalent is FSKAX, Fidelity Total Market Index Fund. Fidelity does not have an ETF equivalent. Only buy Fidelity mutual funds through a Fidelity account to avoid unnecessary fees. 

State Street does not provide an SPY mutual fund equivalent. But several SPY alternatives have lower fees, including: 

  • Vanguard’s S&P 500 Index Fund Admiral Shares (VFIAX)
  • Vanguard’s S&P 500 ETF (VOO)
  • Fidelity’s S&P 500 Index Mutual Fund (FXAIX); Fidelity does not have an ETF equivalent 
  • iShares Core S&P 500 ETF (IVV)

Customers of online brokers that charge fees for mutual funds should use the VTI or SPY ETFs to gain investment exposure.

Mutual funds trade differently than ETFs, which trade like stocks. 

ETFs are easier to own, and the price changes throughout the day. Mutual funds only trade at the market close. 

Active investors typically use ETFs for trading purposes or to buy and hold indexes when they can’t access index mutual funds.

For example, if you have an investing account with M1 Finance, you’d invest via ETFs instead of mutual funds.

Conclusion

Deciding between VTI vs SPY comes down to exposure to all U.S. stocks vs only the 500 largest. VTI also has a lower expense ratio for cost-conscious investors. 

The VTI ETF includes all U.S. large-cap, mid-cap, and small-cap stocks (about 3,700 stocks in total)

The SPY ETF includes only U.S. large-cap stocks (about 504 stocks in total). 

VTI holds all the stocks that SPY has, but SPY does not hold all the stocks VTI holds. 

The VTI and SPY overlap is significant — 88% as of early 2024. That means the funds are about 88% identical. The other 12% in VTI is allocated toward small and mid-cap stocks SPY doesn’t hold.

SPY has outperformed VTI over the past 10 years, but only slightly as of writing. However, SPY has a greater concentration of risk exposure in the top 10 holdings and funds altogether. But the risk is minimal since the S&P 500 is a broad index already. 

If the stock market declines significantly, both ETFs will decline in tandem. The divergence between large-cap and small-cap returns is the main scenario that would cause dissimilar returns. 

VTI has nearly seven times as many holdings as VTI. However, because it is a market cap-weighted fund, a large portion is allocated to giant tech companies such as Apple and Microsoft. 

Investors who want to own the entire U.S. stock market with one fund should choose VTI. 

Investors who want to track only the largest U.S. stocks in the S&P 500 should choose SPY. SPY investors can also supplement their portfolio with small and mid-cap ETFs. 

Own VTI or SPY in retirement accounts to save on dividend taxation. 

Purchase either ETF at any commission-free online broker. 

Please reply with your questions regarding VTI vs SPY in the comments section below. Include any requests you have about adding more detail to this article. 

Additional Resources

Disclosure: The author owns VTI and multiple stocks in the top 10 holdings of each fund. I’ve chosen the VTI ETF for myself for broad exposure through one fund, but please evaluate both funds in the context of your personal investment objectives before choosing which is right for you. 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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