VTI vs SPY
Vanguard Total Stock Market ETF vs SPDR S&P 500 ETF Trust
Bottom line: VTI covers the entire US market at a lower cost; SPY is a pure S&P 500 fund prized for trading liquidity. Long-term investors usually prefer VTI.
At a Glance
| VTI | SPY | |
|---|---|---|
| Issuer | Vanguard | State Street |
| Index Tracked | CRSP US Total Market Index | S&P 500 Index |
| Expense Ratio | 0.03% | 0.0945% |
| Data Start Date | 1992-05-01 | 1993-02-01 |
Price History
Two different jobs
VTI and SPY are often compared, but they were built for different purposes. SPY is a highly liquid S&P 500 trading vehicle; VTI is a low-cost total-US-market fund for accumulation.
SPY holds about 500 large-cap stocks. VTI holds several thousand, adding the mid- and small-cap layer that SPY leaves out.
Cost and structure
VTI's expense ratio is well below SPY's, and as a standard open-end fund it reinvests dividends internally. SPY's unit-investment-trust structure holds dividends as cash until distribution, a small drag over time.
For a taxable buy-and-hold account, VTI's lower cost and broader base make it the more efficient long-term core.
Where SPY wins
If you trade frequently or use options, SPY's unmatched liquidity is a real advantage. For everyone dollar-cost-averaging into a retirement account, that liquidity is irrelevant and the cost difference favors VTI.
Investors who specifically want the S&P 500 rather than the total market should compare VOO instead of SPY, since VOO offers the same index at a lower cost.
Frequently Asked Questions
Is VTI or SPY better for long-term investing?
VTI is usually better for long-term investors: it costs less, covers the whole US market, and reinvests dividends internally. SPY's advantages — liquidity and options depth — mainly benefit active traders.
What is the difference between VTI and SPY?
SPY tracks only the S&P 500 large caps, while VTI tracks the entire US stock market including mid- and small-caps. VTI also has a lower expense ratio.
Hypothetical historical performance based on backtested data. Past performance does not guarantee future results. This site is for educational purposes only and does not constitute investment advice. Full disclaimer