VTSAX vs VOO: Comparing Vanguard's Popular Funds - Retire Before Dad (2024)

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

Both are passively managed index funds popular in retirement accounts.

Index mutual funds and exchange-traded funds (ETFs) track market indexes, such as the S&P 500.

VTSAX is much broader than the S&P 500. The fund tracks around 4,000 stocks, including U.S. small-, mid-, and large capitalization stocks.

VOO 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 choose stocks. They allocate money to all stocks in the market index to achieve a similar performance. Management companies 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 VOO, it’s important to keep the following in mind:

• Both funds are excellent, low-fee options for your portfolio. Brokers like M1 Finance automate dividend reinvestment and optimize the compound interest effect.
• VTSAX is a mutual fund. VOO is an ETF. They trade differently.
• The fund compositions and returns are similar.
• VTSAX includes small, mid, and large-cap stocks, while VOO only holds large-cap stocks.
• If you already have a Vanguard account, either choice 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 Vanguard’s most updated information. 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 ETF(VOO)

VTSAX vs VOO Analysis

Side-by-Side Comparison

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

A few noticeable differences comparing VOO vs VTSAX:

• The benchmark indexes are different.
• VOO is larger from a net assets perspective, though VTSAX remains one of Vanguard’s largest index funds.
• Both expense ratios are very low — nearly identical at the time of writing.
• VTSAX has a $3,000 minimum investment. The VOO minimum investment is $1. You can buy the Vanguard VTSAX equivalent ETF (VTI) for $1 minimum (see ETFs section).
• Long-term returns favor VOO as of early 2024. But I’ve seen some back-and-forth over shorter-term durations over the years (see chart below for the 10-year performance).
• Diversification is better with VTSAX.

Holdings Overlap

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

Therefore, there is a significant overlap between the funds.

The top 500 stocks in VTSAX make up approximately 87% of the ETF’s weighted holdings. The balance of stocks, about 3,200 small and mid-cap stocks, comprise the remaining 13% of the ETF’s weighted holdings.

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 3,500 constituents, making up nearly all equities in U.S. markets. Vanguard uses several CRSP indexes to build its low-cost index funds.

VOO is indexed to the S&P 500 Index.

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

The index has about 504 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 influence price fluctuations more 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.

Performance Chart

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

Here is a daily updated VTSAX vs VOO comparison chart over ten years. Scroll right on mobile.

VOO has outperformed over longer periods because it holds the largest, fastest-growing U.S. companies as a greater proportion of the total holdings.

For example, the 2023-2024 rise of NVIDIA contributed more to VOO than VTSAX.

We’d expect some of the small and mid-cap stocks to lift VTSAX. But instead, the broader holdings tend to hold back the index compared to the more concentrated VOO.

But not all fast-growing stocks get into the S&P 500 during their growth stage. For example, Tesla stock was added to the S&P 500 Index in December 2020. By then, it was a $500 billion company and contributed heavily to broader funds like VTSAX.

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

Nonetheless, these funds track each other closely. VOO is slightly less volatile (measured by beta) and risky during periods of volatility because its holdings are more established large companies.

VTSAX could catch up if the large-cap stocks lose value and small and mid-cap stocks gain favor.

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.

Top Ten Holdings

Here are the top ten holdings for each index fund. For the most updated lists, visit the links at the beginning of the article.

Fund Equivalents

• The VTSAX ETF equivalent is VTI. Compare VTSAX vs VTI.
• The VOO mutual fund equivalent is VFIAX. Compare VOO vs VFIAX.
• The VTSAX Fidelity equivalent is FSKAX. Compare VTSAX vs FSKAX.
• The VOO Fidelity equivalent is FXAIX. Compare FXAIX vs VOO.
• The VTSAX iShares equivalent is ITOT.
• The VOO iShares equivalent is IVV. Compare IVV vs VOO.
• The VOO State Street equivalent is SPY. Compare VOO vs 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 may prefer using the index funds VTSAX or VFIAX.

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 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 or 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.

Conclusion

Both funds are excellent. Fund performances are closely correlated because of significant holdings overlap.

Deciding between VTSAX or VOO comes down to broader U.S. market exposure vs. large-cap-only U.S. stocks. Also, mutual fund vs ETF.

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

If you have a long-term investment horizon (more than five years) and prefer to own the largest U.S. companies with less volatility and better performance during down markets, buy VOO.

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, ITOT, 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 VOO in the comments section below. Include any requests you have about adding more detail to this article.

Additional Resources

• VOO Top Holdings
• VOO Dividend History
• VTI Top Holdings
• VTI Dividend History
• VTI vs SPY

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.