VTI vs VOO: Total Market vs S&P 500

Both from Vanguard, both 0.03% fees. Here's what NZ investors need to know about these two giants.

Quick Answer for Kiwi Investors

They're almost identical. VTI and VOO have 99%+ correlation because VOO's 500 stocks represent ~80% of VTI. VTI adds small-cap exposure (~10%), but both deliver essentially the same returns. Pick either and stick with it.

Head-to-Head Comparison

Feature VTI VOO
Expense Ratio 0.03% 0.03%
Holdings 4,000+ ~500
Market Coverage 100% US market ~80% US market
Small-Cap Exposure ~10% 0%
Dividend Yield ~1.3% ~1.4%
Share Price ~$290 ~$540
10-Year Correlation 99%+

The Honest Truth

This comparison barely matters. VTI and VOO perform almost identically. The top 500 companies (VOO) make up about 80% of the total market (VTI).

Over 10+ years, the return difference is typically less than 0.5% total. Spend your energy on saving more and staying invested rather than agonizing over VTI vs VOO.

The Small-Cap Argument for VTI

Why VTI's Small Caps Matter

  • • Historically, small caps have outperformed over very long periods
  • • More diversification (4000 vs 500 stocks)
  • • Tomorrow's large caps are today's small caps
  • • "Own the whole haystack"

Why It May Not Matter

  • • Small caps only ~10% of VTI anyway
  • • Recent decades: large caps outperformed
  • • Returns are 99% correlated with VOO
  • • You won't notice the difference

For New Zealand Investors

Same Platforms

Both available on Hatch, Stake, Sharesies, and Interactive Brokers.

Same Tax Treatment

Both are US-domiciled Vanguard ETFs. Identical FIF rules, same 15% US withholding tax.

Share Price Consideration

VTI (~$290) is cheaper per share than VOO (~$540). If you're investing smaller amounts without fractional shares, VTI is more accessible.

Key Differences

VTI Characteristics

  • Total US market (4,000+ stocks)
  • Includes ~10% small-cap exposure
  • Lower share price (~$290)

VOO Characteristics

  • S&P 500 large-cap focus (~500 stocks)
  • S&P inclusion criteria act as quality screen
  • Slightly higher dividend yield (~1.4%)

Honestly? Flip a coin. Then invest consistently and don't look back.

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