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VTSAX vs VTI: Which One Should You Choose?

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We Compare VTSAX vs VTI.

Vanguard Total Stock Market Index Fund (VTSAX) vs Vanguard Total Stock Market ETF (VTI).

Investors may find it difficult to choose between VTSAX vs VTI.  However, these Total Market funds are the most popular investment funds globally and have shown strong performance.

Both VTSAX and VTI have over $1 trillion in total net assets.

In addition, the Vanguard funds, to a considerable degree, reflect identical underlying investment holdings.  That’s why differentiating between the two may be tricky.

That said, VTSAX and VTI are mainly identical, but they are not the same.

VTSAX Is An Index Fund.

VTI Is An Exchange-Traded Fund (ETF).

Let’s get into some more differences.

VTSAX vs VTI Graphic

 

VTSAX vs VTI

The main difference between VTSAX and VTI is that VTSAX is an Index Fund while VTI is an Exchange-Traded Fund (ETF).  VTSAX and VTI track the same underlying index, the CRSP U.S. Total Market Index.

VTI is an Exchange Traded Fund.

VTSAX is an Index Fund.

I have another post with a full explanation of the difference between an ETF and an Index Fund.

Vanguard Total Stock Market (VTI) is the ETF equivalent of the top-rated index fund, VTSAX.

VTI provides investors with the same market exposure as its admiral version, VTSAX but at a lower expense ratio of 0.03%.

VTSAX

  • Fund Inception: 2000
  • Tracks the CRSP US Total Market Index
  • Expense Ratio: 0.04%
  • Vanguard Fund
  • Minimum Initial Investment: $3,000
  • Number Of Stocks: 3535
  • Equivalent ETF (VTI)

VTI

  • Fund Inception: 2000
  • Tracks the CRSP US Total Market Index
  • Expense Ratio: 0.03%
  • Vanguard ETF
  • No Minimum Investment
  • Number Of Stocks: 3535
  • Admiral Shares (VTSAX)

Both VTSAX and VTI have low expense ratios; however, VTI’s expense ratio is lower than VTSAX’s.

VTI expense ratio is 0.03%.

VTSAX expense ratio is 0.04%.

Lastly, VTI is an exchange-traded fund (ETF); therefore, it trades intraday, while VTSAX only trades once daily at market close.

 

VTSAX vs VTI Performance

VTSAX and VTI have had the same performance over the last 10 years.  This is because they both track the same index (CRSP U.S. Total Market Index).

The total return for VTI over the last 10 years is 14.25% per year.  Likewise, the total return for VTSAX over the previous 10 years is 14.25%.

No difference!

As far as performance, VTSAX and VTI have had identical performance returns over the last 10 years.

VTSAX vs VTI Performance

VTSAX (Blue)      VTI (Yellow)

 

VTSAX vs VTI Holdings

Vanguard’s VTSAX and VTI have the same holdings.  They are also weighted the same, with VTSAX having 27% in technology and the same for VTI.

Both VTSAX and VTI are broad-based funds diversified in several market sectors.

Here are both VTSAX and VTI holdings:

VTSAX and VTI Holdings

 

VTSAX vs VTI Similarities

Both VTSAX and VTI are passively managed funds.  They were created by John Bogle, the founder of the Vanguard group and a significant proponent of index investing, who thought of a cost-effective and independent solution to index investing.

He sought a passive strategy that translates to a lower expense ratio, turnover, and management fees.

The ideology behind passive management is to track the market rather than attempt to beat the market.  This makes it easier to reduce expenses.

In 1975, John Bogle, popularly called Jack, founded the first-ever index fund, Vanguard 500, to imitate the S&P 500. 

Then in 1992, he created VTSAX, and in 2001, VTI as an ETF of VTSAX.

These two funds would cover almost the entire U.S stock market and track the CRSP U.S. Total Market Index.

VTSAX and VTI both hold about 3,500 stocks.  They have a significant emphasis on technology, financials, and healthcare.

VTSAX and VTI Allocation

  • Technology: 24.2%
  • Financials: 16.8%
  • Healthcare: 14.8%

Vanguard’s VTSAX and VTI each have $1.3 trillion in total assets.

 

VTSAX vs VTI Differences

The main difference between VTSAX and VTI is that VTSAX is an index fund while VTI is an ETF.  Another significant difference is their expense ratio.  VTSAX has an expense ratio of 0.04%, while VTI has an expense ratio of 0.03%.

VTSAX also has a minimum investment of $3,000, while VTI has no minimum investment.

VTSAX vs VTI Comparison Chart

Let’s see the other factors that differentiate them to enable you to choose.

 

1. The Minimum Investment

One significant difference between VTSAX and VTI lies in the minimum investment.  This implies the smallest dollar an investor must deposit with the fund when purchasing shares.

The initial minimum investment for VTSAX is $3000.

After the first investment, subsequent investments will depend on how much you purchase.

For VTI, the minimum investment is equivalent to the share price.

If VTI has a share price of $100, you will need $100 to purchase one share.  If the share price changes, the minimum investment changes simultaneously.

VTSAX’s minimum investment is $3000

VTI has no minimum investment

However, note that that’s the minimum investment, which means that you can invest more but not less.

 

2.  Expense Ratios

The expense ratio can be defined as trading costs, how much (in percentage) of the funds’ assets went into management, administrative, and other operating expenses.

If a fund’s expense ratio is 0.04%, it uses $4 out of each $10,000 to cover all its expenses.

VTSAX has an expense ratio of 0.04%

VTI has an expense ratio of 0.03%

Both VTSAX and VTI have very low expense ratios, the difference is not significant, but you might want to save 0.01% on VTI.

Save more when you invest with M1 Finance.  (Get $50 When You Use This Link)

Here is your guide to getting the M1 Finance $50 Bonus.

 

3.  Real-Time Pricing

The most significant difference between an index fund and an ETF is how they are traded.

Investors can only buy and sell index funds once a day.  This is usually at the end of the day, during market close.

ETFs trade like regular stocks.  You can buy or sell ETFs anytime you want.

As a result, ETFs trade throughout the day.

Since VTSAX is an index fund, you can price each share only at the end of the day.

VTI is an ETF; you can trade the fund anytime during market hours.  The price fluctuations happen throughout the day.

VTSAX trades once a day

VTI trades throughout the day

With VTI, you can monitor the price changes throughout the day.  However, this isn’t an advantage as it can cause you to fall into trading instead of long-term investing.

 

4.  Automatic Investments & Withdrawals

Automatic investments have become a fast-growing and vital feature of many funds today.  It fills in for the insufficiencies of the manual approach.

VTSAX supports automatic investment

VTI does not (except with M1 Finance)

VTSAX trades only at the end of the day, making it easy to set automatic investments.  This, however, is not the case with VTI since you’ll need to monitor the market throughout the day to know when to buy.

Therefore, VTI does not support automatic investment.  (Again, except with M1 Finance)

In VTI, the human element is very much involved.  For example, you have to go into the market and create “buy” orders when you want to purchase.

This negates what automation seeks to achieve: minimal human involvement, affecting your investment.

Here is where M1 Finance can be a significant advantage!

M1 Finance allows you to purchase VTI automatically and for no cost.

 

VTSAX Profile

  • Fund Inception: 2000
  • Tracks the CRSP US Total Market Index
  • Expense Ratio: 0.04%
  • Vanguard Fund
  • Minimum Initial Investment: $3,000
  • Number Of Stocks: 3535
  • Equivalent ETF (VTI)

Vanguard Total Stock Market Index Fund Admiral Shares (VTSAX) represents close to 100% of the U.S. equity market that is publicly traded.  It also tracks the CRSP U.S. Total Market Index.

Vanguard’s VTSAX has an expense ratio of 0.04%.

This notably implies that the fund has limited exposure to several international stocks.

However, this does not affect the companies represented in the fund.  These stocks have a significant international presence.

 

VTSAX Performance

Vanguard Total Stock Market Index Fund Admiral Shares (VTSAX) is famous for many reasons, of which consistent returns are a significant part.

VTSAX Performance Chart

Its risk level is similar to that of the S&P 500.

VTSAX Performance Chart

 

VTSAX Holdings

Vanguard’s VTSAX is primarily made up of Apple, Microsoft, Google, Amazon, and Tesla and provides exposure to over 3500 stocks.

Here are the top 10 holdings for VTSAX:

VTSAX Top 10 Holdings

Major sectors in the index include:

  • Healthcare
  • Technology
  • Consumer Services
  • Financials
  • Industrials

The top 10 holdings make up 25% of its total net assets.

 

VTSAX Minimum Investment

For a first-time investment in VTSAX, you need to have a minimum of $3,000.  After that, you are at liberty to invest any amount you want.

As a first-time investor in VTI, you only need to have the price of one share as a minimum investment.  So, for example, if VTI’s share price is $50, you can invest in the fund with as little as $50.

So if you are starting small, your best choice might be VTI.

As an alternative, you could invest with no minimum requirement into VTSAX’s ETF equivalent, which is VTI, through the Vanguard platform or M1 Finance.  (Use this link for a $50 Bonus)

I also use Personal Capital to track my investment fees. They have a free Retirement Fee Analyzer that tells you the future impact of fees on your portfolio.

Personal Capital Retirement Fee Analyzer

Personal Capital’s free tools allow you to easily find which of your investments has high fees so that you can switch them to low-cost options.  (Get a $20 Amazon Gift Card with this link when you add at least one investment account containing a balance of more than $1,000 within 30 days)

 

VTI Profile

  • Fund Inception: 2000
  • Tracks the CRSP US Total Market Index
  • Expense Ratio: 0.03%
  • Vanguard ETF
  • No Minimum Investment
  • Number Of Stocks: 3535
  • Admiral Shares (VTSAX)

Vanguard Total Stock Market ETF (VTI) represents close to 100% of the U.S. equity market.  It also tracks the CRSP U.S. Total Market Index.

Vanguard’s VTI has an expense ratio of 0.03%.

This implies that the fund has limited exposure to several international stocks.

Yet, this does not affect the companies represented in the fund.  Moreover, these stocks have a significant international presence.

VTI is the ETF version of the VTSAX.

John Bogle created the fund in 2000 to let investors take advantage of the unique benefits of an ETF.

Since its inception, VTI has continued to grow and is among the world’s top ETFs.

In addition to being a passive index fund, VTI has a low turnover rate.  VTI also has a very low expense ratio.

These features make it attractive to investors.

Like VTSAX, VTI is a passive investment vehicle, well-diversified, and tracks the CRSP U.S. Total Market Index.  It is an index that measures the entire investable equity market in the United States.

The fund is market capitalization-weighted, with small-cap, mid-cap, and large-cap companies.

 

VTI Performance

Vanguard Total Stock Market ETF (VTI) is famous for so many reasons, of which consistent returns are a significant part.

VTI Performance Chart

VTI Performance

Its risk level is similar to that of the S&P 500.

VTI vs S&P 500 Performance Chart

 

VTI Holdings

Vanguard’s VTI is primarily made up of Apple, Microsoft, Google, Amazon, and Tesla and provides exposure to over 3500 stocks.

Here are the top 10 holdings for VTI:

VTI Top Holdings

Major sectors in the index include:

  • Technology
  • Healthcare
  • Consumer Services
  • Financials
  • Industrials

The top 10 holdings make up 25% of its total net assets.

 

Which Is Better VTSAX or VTI?

VTSAX and VTI are identical in performance.  They both offer exposure to the total U.S Stock Market at a low expense ratio.  Which is better depends on your preference between index funds or ETFs.

You will also prefer VTI if you want to get the lowest cost fund.  However, in my opinion, the difference in cost between these two funds is insignificant even over the long term.

VTSAX and VTI are great options, especially as core holdings in a long-term investment portfolio.

They both offer investors advantages over investments in individual stocks; these include:

  • Diverse Holdings

Diversification is a significant advantage that both VTSAX and VTI offer.  Diversified holdings keep risk and volatility low.

Both VTSAX and VTI provide exposure to U.S investable equities, including growth and value stocks across different market capitalization levels.

This makes VTSAX and VTI perfect for long-term investors.

Although many other index funds in the U.S offer diversified portfolios, these two are notable. 

The S&P, for instance, has narrow inclusion criteria.  As a result, it holds a smaller number of stocks, of which most are large-cap stocks. 

VTSAX and VTI are also cap-weighted.  As a result, they offer more diversification than most funds in the U.S, including the S&P 500.

  • Solid Returns

Solid market-beating returns are another benefit investors reap from investing in VTI and VTSAX.  The strong returns stem from the funds’ concentration on U.S. equities.

Equities are distinguished investments as they tend to offer strong returns.

Shareholders can benefit from underlying corporate profits.

With well-performing and growing stocks such as Apple, Microsoft, and Amazon, to name a few, shareholders stand a high chance for impressive Returns On Investment (ROI).

VTSAX and VTI have slightly outperformed the S&P 500 over the years.

VTI vs S&P 500 Performance

VTSAX / VTI (Blue)      S&P 500 (Yellow)

One solid factor is that these funds are all-cap funds.  Research has shown that for decades, smaller companies have produced higher returns.  They tend to outperform as they are usually undervalued.

Also, smaller companies have room for growth.  If investors decide to look beyond the risk and invest heavily, the stocks’ value will skyrocket.

  • Low Expenses

Low expenses can significantly increase your returns on investment.  Therefore, it benefits both the shareholders and the fund.  It is one surefire way to boost returns.

VTI and VTSAX are passive investments, meaning that there are little or no trading costs, unlike active investing.

The expense ratio for VTI is 0.03%, while VTSAX has an expense ratio of 0.04%.

Functionally, these ratios are equal to zero.  So, in essence, it is just $3 for each $10,000 investment in VTI, which is way below industry standards.

  • Low Turnover

The turnover ratio represents the proportion of stocks that have been replaced within one year.

Vanguard’s VTSAX has a turnover ratio of 8%.

 

My Winner: VTSAX and VTI

The differences between VTSAX and VTI are very slight.  However, these differences may not be entirely negligible.

First off, if you are starting small, you could opt for VTI.

Secondly, if you prefer the simplicity of once-a-day trading, you could go with VTSAX.

Also, automation is essential in investing, and VTSAX has it.

Lastly, the difference between the two funds may be negligible when it comes to the expense ratio.

In all, the decision of VTSAX vs VTI is yours to make.

Listen to my interview with JL Collins to learn why VTSAX and VTI are so popular in the FIRE community.

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Disclaimer
This post may have affiliate links, which means I may receive commissions if you choose to purchase through links I provide (at no extra cost to you). Thank you for supporting the work I put into this site!

This information is my opinion and is for information purposes only. It is not intended to be investment advice. Seek a duly licensed professional for investment advice.
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