VTSAX vs VFIAX: Comparing Total Market and S&P 500 Index Funds

This article compares VTSAX vs VFIAX — Vanguard’s Total Market Index Fund Admiral Shares to Vanguard’s S&P 500 Index Fund Admiral Shares. 

Both are passively-managed index mutual funds popular in retirement accounts.

Index mutual funds track market indexes, such as the S&P 500. 

VTSAX is much broader than the S&P 500. The fund tracks more than 4,000 stocks.

VFIAX tracks the S&P 500 Index, one of the three most popular U.S. indices (the Dow Jones Industrial Average and Nasdaq 100 being the other two).

The fund owns shares of the largest 500 U.S. companies.

If you own either fund, you own a tiny piece of the largest public companies in the U.S. 

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 mutual 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 VTSAX vs VFIAX, it’s important to keep the following in mind:

• Both funds are excellent, low-fee options for your portfolio. 
• The fund compositions and returns are similar. 
• The main difference between funds is the number of holdings. VTSAX includes small, mid, and large-cap stocks. VFIAX only holds large-cap stocks.
• If you already have a Vanguard account, either mutual fund is available with no purchase fees and a low expense ratio. 
• If you do not have an account with Vanguard and use a different online broker, ETF equivalents are a better choice (see ETFs section).

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

The best resource for both funds is Vanguard’s website. 

Here are links to the most updated information at Vanguard. Consider the information on those pages to be the authoritative data source.

• Vanguard Total Stock Market Index Fund Admiral Shares (VTSAX)
• Vanguard S&P 500 Index Fund Admiral Shares (VFIAX)

VTSAX vs VFIAX — Side-by-Side Comparison

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

A few noticeable differences comparing VFIAX vs VTSAX:

• The benchmark indexes are different.
• VTSAX is larger from a net assets perspective. Though, VFIAX is still one of the largest index funds at Vanguard.
• Both funds were established on the same inception date. 
• Both expense ratios are very low — identical at the time of writing.
• Both Vanguard funds have a $3,000 minimum investment. However, you can buy the Vanguard equivalent ETFs (VTI and VOO) for no minimum (see ETFs section).
• Three and five-year returns favor VFIAX by less than 0.50%. Longer-term returns slightly favor VTSAX (see chart below).
• Diversification is better with VTSAX.

VTSAX vs VFIAX— Benchmark Indexes

VTSAX 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 4,000 constituents, making up nearly all equities in U.S. markets. Vanguard uses several CRSP indexes to build its low-cost index funds. 

VFIAX is indexed to the S&P 500 Index. 

S&P Global owns the S&P 500 Index. Visit this page to find a Fact Sheet and Methodology documentation with the latest information on that page.

The index has about 500 U.S. constituents. 

Why are there more than 500 holdings in the S&P 500 Index? The total number of holdings may exceed 500 because a few companies are listed twice (Alphabet, for example, has more than one ticker for differing class shares — GOOG and GOOGL). 

Both indices are market-weighted, meaning the largest holdings make up a greater percentage of the index and have a greater influence on price fluctuations than smaller companies. 

Since the CRSP U.S. Total Market Index contains all of the S&P 500 Index stocks, and both are market weighted toward large companies, their performances are quite similar. 

VTSAX vs VFIAX Chart — Performance

The performance of these two funds tracks similarly, especially in shorter-term investment periods. 

Here is a daily updated VTSAX vs VFIAX chart tracking each other over ten years. Scroll right on mobile.

Copy and paste the following code to embed this chart in your website. Please use the link for attribution. 

<p style="text-align: center;"><iframe width="700" height="450" seamless frameborder="0" scrolling="no" src="https://docs.google.com/spreadsheets/d/e/2PACX-1vRIG1vPVAQQkNgbTANWi7GMu1X4GfXcRNImIaoSy12onMBcR6ozRBdryNxYs4c0GzO3S-lgVrXhX24J/pubchart?oid=233418497&amp;format=interactive"></iframe></p><p style="text-align: center;"><span style="font-size: 10pt;">Source: <a href="https://www.retirebeforedad.com/vtsax-vs-vfiax/?utm_source=referral&utm_medium=attribution&utm_campaign=vtsax_vfiax">RetireBeforeDad.com/vtsax-vs-vfiax</a></span></p>

We expect VTSAX to outperform VFIAX over longer periods because it holds small and mid-cap outperformers before they qualify to be part of the exclusive S&P 500 Index. 

For example, Tesla stock was added to the S&P 500 Index in December 2020. By then, it was a $500 billion company. 

VFIAX did not count Tesla as a holding until December 2020, while VTSAX held Tesla stock from its IPO date of June 29th, 2010. 

Nonetheless, year-to-year, these funds track each other closely. During periods of volatility, we’d expect the VFIAX to be less volatile and risky because its holdings are more established large companies. 

However, over more extended periods (10+ years), VTSAX should continue to outperform because of exposure to small and mid-cap outperformers. 

Either one is suitable for broad equity coverage in your portfolio.

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

VTSAX vs VFIAX — 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. 

VTSAX vs VFIAX — ETF Equivalents

Here are the ETF equivalents for both mutual funds. 

• VTSAX = VTI
• VFIAX = VOO, SPY

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, 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. If your account is with Vanguard, you will benefit from using the index funds VTSAX or VFIAX. 

Vanguard has an ETF called the Vanguard Total Stock Market Index Fund (symbol: VTI) that is essentially the same investment as VTSAX. But it’s an ETF, not a mutual fund. 

Therefore, you can buy VTI on a stock exchange from any online broker.

Vanguard also has an ETF called Vanguard S&P 500 ETF (symbol: VOO) that is essentially the same investment as VFIAX. But it’s an ETF, not a mutual fund. 

State Street, a financial services first, facilitates a more widely known and referenced ETF called the SPDR® S&P 500® ETF Trust (symbol: SPY) that will accomplish the same investment objective as VOO or VFIAX. 

• Learn more about VTI here
• Learn more about VOO here 
• Learn more about SPY here 

Use the above resources to find the most up-to-date information regarding VTI vs VOO vs SPY.

VTSAX vs VFIAX — Fidelity Index Fund Equivalents

If you have a Fidelity account and prefer their funds, you should own the Fidelity equivalent mutual funds instead of Vanguard to avoid unnecessary fees. 

Here they are 

• VTSAX = FSKAX
• VFIAX = FXAIX

Vanguard vs. Other Online Brokers. 

If you’re considering buying mutual funds, you’ll want to use your existing Vanguard account or open a new account. 

Vanguard does not charge a fee when you buy a Vanguard mutual fund with a Vanguard account. 

Other brokers that allow access to Vanguard mutual funds may charge an extra fee. 

For example, due to an asset transfer, I owned VTSAX in my Fidelity account. Holding or selling VTSAX did not cost me extra.

However, buying more of the fund would have cost me an extra $75 per transaction. Therefore, I invest in FSKAX instead of VTSAX. 

Most online brokers act provide the same technologies and services. 

One significant difference between Vanguard and most other brokers is the ownership structure. Vanguard is owned by its clients, so its interests are aligned with them. 

Other brokers are typically publicly owned (trade on stock markets exchanges) or are owned by a wealthy family and the company employees (Fidelity).

Therefore, some argue that Vanguard is better aligned with its customers than most brokers. However, for Fidelity, Schwab, and others to compete with Vanguard, they must offer the same or similar products, such as the index funds that Vanguard pioneered in the 1970s. 

Since the advent of ETFs and Charles Schwab’s decision to eliminate trading fees, all online brokers have allowed seamless access to low-cost index investing options.

Here are my favorite online brokers for investing in ETFs. 

What is the Best Broker for Total Market and S&P 500 ETFs if not Vanguard?

Vanguard and Fidelity are excellent choices for long-term retirement investors. You’re in good hands if your IRA or employer-sponsored plan is with either broker.

I recommend another broker for a more modern user experience that can also serve your 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. M1 Finance is a reliable and robust, no-fee online 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, 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

Conclusion

Deciding between VTSAX or VFIAX comes down to long-term total returns vs. near-term performance and volatility.

The fund performances are nearly identical in the near term. But VTSAX wins vs. VFIAX over the long term.

If you have a long-term investment horizon (more than five years) and want broader market exposure for diversification, buy VTSAX.

If you prefer to own the largest U.S. companies with less volatility and better performance during down markets, buy VFIAX. 

If you already have an account with another broker (not Vanguard) and still want to own a total market or S&P 500 index fund, choose an ETF such as VTI, VOO, or SPY instead of mutual funds. 

ETFs will give you the same coverage, performance, and low cost at any commission-free online broker. 

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

Additional Resources

• VTSAX vs VTI
• SCHD vs VYM
• VOO vs VTI
• VFIAX vs VOO
• VOO vs VTSAX

Disclosure: The author is long FSKAX, FXAIX, 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.