VOO vs VTI: S&P 500 or Total Market? Here's What Actually Matters
VOO vs VTI is perhaps the most common debate among index fund investors. Both are from Vanguard, both have rock-bottom fees, and both have delivered excellent long-term returns. So which one should you choose?
Here's the truth: for most investors, it barely matters. But there ARE real differences worth understanding. Let's break it down.
Quick Comparison at a Glance
What VOO Actually Gives You
VOO (Vanguard S&P 500 ETF) tracks the S&P 500 index — America's 500 largest publicly traded companies. This is the index Warren Buffett has famously recommended to his family and most investors.
The S&P 500 includes household names: Apple, Microsoft, Amazon, Google, JPMorgan, Johnson & Johnson. These are established, profitable blue-chip companies that dominate the US economy.
What VTI Actually Gives You
VTI (Vanguard Total Stock Market ETF) goes broader. It includes everything in VOO plus about 3,500 additional mid-cap and small-cap stocks. You get the entire investable US stock market.
That extra 20%? It's smaller companies — the next generation of market leaders. Some will grow into large-caps; many won't. But this small/mid-cap slice has historically provided slightly higher returns over very long periods.
The Real Question: Does the Difference Matter?
Let's be honest: over any 10-20 year period, VOO and VTI have performed almost identically. The correlation between them is over 99%.
Choose VOO if:
- You want simplicity (S&P 500 is the most tracked index)
- You believe large-caps will continue outperforming
- You want the "Warren Buffett portfolio"
- You already have small-cap exposure elsewhere
Choose VTI if:
- You want true "total market" diversification
- You believe small-caps will have their day
- This is your only US stock holding
- You don't want to worry about missing anything
30-Year Historical Perspective
Let's look at what $10,000 invested 30 years ago would be worth today:
*Historical data varies by time period. In some decades, large-caps (VOO) outperformed. In others, small-caps boosted VTI. Neither consistently wins.
What About SPY or IVV?
If you're considering VOO, you might also be looking at SPY or IVV. All three track the S&P 500:
- VOO (Vanguard): 0.03% expense ratio — cheapest
- IVV (iShares): 0.03% expense ratio — tied for cheapest
- SPY (SPDR): 0.0945% — most liquid, popular with traders
For long-term investors, VOO or IVV is better due to lower fees. SPY is preferred by active traders for its options liquidity.
The "Pick One and Forget It" Strategy
Here's what experienced investors know: the decision between VOO and VTI matters far less than:
How much you invest
$500/month into either fund will build wealth. Zero into a "perfect" fund won't.
How long you stay invested
Time in market beats timing the market. Both funds reward patience.
Whether you panic sell
Selling during crashes is the real wealth destroyer — not your VOO vs VTI choice.
The Bottom Line
VOO and VTI are both excellent. They're essentially two flavors of the same thing. If you can't decide, flip a coin — seriously. The psychological comfort of having "chosen right" matters more than the negligible performance difference.
Most financial advisors won't tell you this, but: either fund held for 20+ years will likely make you wealthy. The real risk is analysis paralysis keeping you on the sidelines.
Run Your Own Numbers
Compare projected returns for VOO and VTI with your own investment amounts and timeline.