Vanguard Total Stock Market ETF (VTI) and iShares Core S&P Total U.S. Stock Market ETF (ITOT) are both prominent exchange-traded funds offering comprehensive exposure to the U.S. equity market. While they share many similarities, certain distinctions may influence an investor's choice between the two. Below is a detailed comparison:
1. Fund Overview
| Aspect | VTI | ITOT |
|---|---|---|
| Issuer | Vanguard | iShares (BlackRock) |
| Inception Date | May 24, 2001 | January 20, 2004 |
| Expense Ratio | 0.03% | 0.03% |
| Assets Under Management (AUM) | Approximately $467.85 billion | Approximately $65.21 billion |
| Underlying Index | CRSP US Total Market Index | S&P Total Market Index |
Both funds have identical expense ratios, making them cost-effective options for investors.
2. Portfolio Composition
| Metric | VTI | ITOT |
|---|---|---|
| Number of Holdings | 3,896 | 3,321 |
| Top Holdings | Apple Inc. (6.10%)Microsoft Corp. (5.27%)NVIDIA Corp. (4.77%) | Apple Inc. (6.34%)Microsoft Corp. (5.09%)NVIDIA Corp. (4.93%) |
| Sector Allocation | Information Technology (29.22%)Health Care (12.76%)Financials (12.93%) | Information Technology (29.77%)Health Care (12.45%)Financials (12.86%) |
Both ETFs have a similar sector allocation, with a significant emphasis on Information Technology.
3. Performance Metrics
| Time Period | VTI | ITOT |
|---|---|---|
| YTD | -0.72% | -0.80% |
| 1 Year | 14.39% | 14.35% |
| 5 Years (Annualized) | 14.42% | 14.40% |
| 10 Years (Annualized) | 12.31% | 12.36% |
The performance of both ETFs is nearly identical over various time horizons.
4. Dividend Yield
| Metric | VTI | ITOT |
|---|---|---|
| Dividend Yield (TTM) | 1.28% | 1.24% |
VTI offers a slightly higher trailing twelve-month dividend yield compared to ITOT.
5. Risk Metrics
| Metric | VTI | ITOT |
|---|---|---|
| Standard Deviation | 13.23% | 13.35% |
| Sharpe Ratio | 1.21 | 1.20 |
| Max Drawdown | -55.45% | -55.20% |
Both ETFs exhibit similar risk profiles, with comparable standard deviations and drawdowns.
6. Liquidity
| Metric | VTI | ITOT |
|---|---|---|
| Average Daily Volume | Approximately $607 million | Approximately $92 million |
VTI has a higher average daily trading volume, indicating greater liquidity.
Conclusion
Both VTI and ITOT are excellent choices for investors seeking broad exposure to the U.S. stock market. They share similar expense ratios, performance histories, and risk metrics. The primary differences lie in the number of holdings and liquidity, with VTI encompassing more stocks and exhibiting higher trading volumes. Investors may consider these factors alongside their personal preferences and investment strategies when choosing between the two.