The S&P 500 represents the 500 largest companies by market capitalization in the United States. New comments cannot be posted and votes cannot be cast. VOO and VTI are the two most popular U.S. stock market ETFs out there. Also offers the ability to tax gain harvest by selling and buying right back. I am planning on setting up my 1st taxable acct with Fidelity (for convenience, all my other accounts there). Vanguard has by far been extremely successful for investors due to the low expense ratios. So your decision will need to be based on how you see small and mid cap performing over the next decade. It's not as though large caps are guaranteeing capital gains instead. The ETF is 100% allocated to common stock holdings. The VTI index fund tracks the CRSP US Total Market Index. The choice is really up to you–do you want exposure to S&P 500, or a broader basket of stocks, representing the total US market? I'm surprised VOO has 100% QDI. The tax benefits of retirement accounts are well known. Eye-opening article but people should remember that moving money from one “taxable” account to another will result in capital gains/dividend taxes. Apologies in advance if this is too specific of a question, looked for a few hours online. Of course, if you’re in a tax-sheltered account such as an IRA or 401(k) this difference may not matter to you, but for taxable accounts, after-tax performance is what you get. ._1x9diBHPBP-hL1JiwUwJ5J{font-size:14px;font-weight:500;line-height:18px;color:#ff585b;padding-left:3px;padding-right:24px}._2B0OHMLKb9TXNdd9g5Ere-,._1xKxnscCn2PjBiXhorZef4{height:16px;padding-right:4px;vertical-align:top}._1LLqoNXrOsaIkMtOuTBmO5{height:20px;padding-right:8px;vertical-align:bottom}.QB2Yrr8uihZVRhvwrKuMS{height:18px;padding-right:8px;vertical-align:top}._3w_KK8BUvCMkCPWZVsZQn0{font-size:14px;font-weight:500;line-height:18px;color:var(--newCommunityTheme-actionIcon)}._3w_KK8BUvCMkCPWZVsZQn0 ._1LLqoNXrOsaIkMtOuTBmO5,._3w_KK8BUvCMkCPWZVsZQn0 ._2B0OHMLKb9TXNdd9g5Ere-,._3w_KK8BUvCMkCPWZVsZQn0 ._1xKxnscCn2PjBiXhorZef4,._3w_KK8BUvCMkCPWZVsZQn0 .QB2Yrr8uihZVRhvwrKuMS{fill:var(--newCommunityTheme-actionIcon)} VTI stock is one of the largest ETFs in today's stock market. That said, is you believe large caps are more in line with your investment objective, then that should be your reason to go VOO :). Get your ETF recommendation online. But investing in a taxable account can also be tax efficient. I am 32, I have $20k in a 401k, $6500 in a Roth IRA and $60k in a regular savings account (stupid I know). I have $100K in a taxable VFINX fund and moving the money to a cheaper option would NOT be cheaper at all. Which one wins: VTSAX vs VTI tax efficient? ITOT is another option which historically has been more tax-efficient than VTI while tracking total US as well. They’re been outperforming VOO and VTI for years. VTI is slightly better than VOO, but they're invested in 80% the same stuff and are both excellent choices. VFIAX vs. VOO: The Basics. ._3gbb_EMFXxTYrxDZ2kusIp{margin-bottom:24px;text-transform:uppercase;width:100%}._3gbb_EMFXxTYrxDZ2kusIp:last-child{margin-bottom:10px} The weighting is determined by the market capitalization of the companies. They hold the exact same collection of stocks (every individual publicly traded stock in the U.S.), they have the exact same dividend yield, and they earn the exact same annual returns. WANT SOME ADVICE? However, for S&P 500 ETFs, they only have the third-largest ETF. Granted, it's not a good idea to hold taxable-bond funds in a taxable account if you're a high-income investor, but the tax-efficiency statistics are even worse for bond funds. Also VOO being an ETF, you have more price control. I am a pulm-ccm physician in the South-wife is an MD as well. Focus – VFIAX was a pioneer when it was launched on November 13, 2000. Have questions? .ehsOqYO6dxn_Pf9Dzwu37{margin-top:0;overflow:visible}._2pFdCpgBihIaYh9DSMWBIu{height:24px}._2pFdCpgBihIaYh9DSMWBIu.uMPgOFYlCc5uvpa2Lbteu{border-radius:2px}._2pFdCpgBihIaYh9DSMWBIu.uMPgOFYlCc5uvpa2Lbteu:focus,._2pFdCpgBihIaYh9DSMWBIu.uMPgOFYlCc5uvpa2Lbteu:hover{background-color:var(--newRedditTheme-navIconFaded10);outline:none}._38GxRFSqSC-Z2VLi5Xzkjy{color:var(--newCommunityTheme-actionIcon)}._2DO72U0b_6CUw3msKGrnnT{border-top:none;color:var(--newCommunityTheme-metaText);cursor:pointer;padding:8px 16px 8px 8px;text-transform:none}._2DO72U0b_6CUw3msKGrnnT:hover{background-color:#0079d3;border:none;color:var(--newCommunityTheme-body);fill:var(--newCommunityTheme-body)} Great Taxable Account ETFs #3: SPDR Short Term Municipal Bond ETF (SHM) Municipal bonds are made for taxable accounts. The VOO index fund tracks the S&P 500 index, which is a common investing benchmark. The challenge is, everyone knows they are the best and therefore valuations are high. VOO has the lower expense ratio. However, I’m now interested to add muni bonds, and to my knowledge there is no such ETF at Vanguard (not to mention that Bill Bernstein doesn’t believe in … However , If I need to invest in taxable do you think VOO is better considering lower dividend yield and almost always has 100% QDI compared to 90-95% ODI of VTI. Press J to jump to the feed. VTSAX is a mutual fund, whereas VOO is an ETF. 1st taxable account - VTI vs FZROX 01-22-2020, 01:20 PM. Some ETF’s consist of all bonds. Or can I actually invest into $500 each to VTI and VOO? SCHB has around $9 Billion . TPM started Turning Point Money blog in 2017 after spending 20 years designing financial ERP systems for large corporations.He has an MBA in finance and has been a DIY investor for 22 years.He loves reading, saving and investing in individual stocks and other passive investments. VOO over VTI in Taxable account I understand in terms of overall returns both VOO and VTI are very close to each other and expense ratio is same. Your email address will not be published. Rock-bottom fees, broad passive diversification. In this section we will compare the VOO vs VTI. This website is a personal finance blog. 19. If VTI goes into a bubble territory, your allocation rules should force you to rebalance from VTI to VXUS. The ETF has the objective of tracking the performance of the CRSP U.S. Total Market Index, which is a lesser-known benchmark for the domestic … WANT TO LEARN MORE? Great Taxable Account ETFs #4: Vanguard High Dividend Yield ETF (VYM) For investors looking for a bit more income from their taxable accounts have to turn to stocks to find it. ._1zyZUfB30L-DDI98CCLJlQ{border:1px solid transparent;display:block;padding:0 16px;width:100%;border:1px solid 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Sans,Arial,sans-serif;font-size:12px;font-weight:700;letter-spacing:unset;line-height:16px;text-transform:unset}._1ra1vBLrjtHjhYDZ_gOy8F{--textColor:var(--newCommunityTheme-widgetColors-sidebarWidgetTextColor);--textColorHover:var(--newCommunityTheme-widgetColors-sidebarWidgetTextColorShaded80);font-size:10px;font-weight:700;letter-spacing:.5px;line-height:12px;text-transform:uppercase;color:var(--textColor);fill:var(--textColor);opacity:1}._1ra1vBLrjtHjhYDZ_gOy8F._2UlgIO1LIFVpT30ItAtPfb{--textColor:var(--newRedditTheme-widgetColors-sidebarWidgetTextColor);--textColorHover:var(--newRedditTheme-widgetColors-sidebarWidgetTextColorShaded80)}._1ra1vBLrjtHjhYDZ_gOy8F:active,._1ra1vBLrjtHjhYDZ_gOy8F:hover{color:var(--textColorHover);fill:var(--textColorHover)}._1ra1vBLrjtHjhYDZ_gOy8F:disabled,._1ra1vBLrjtHjhYDZ_gOy8F[data-disabled],._1ra1vBLrjtHjhYDZ_gOy8F[disabled]{opacity:.5;cursor:not-allowed} Believe VV has had the most consistent 100% QDI and has a middle ground between VOO/VTI diversification, but I agree you’re splitting hairs. I’m aware VOO is only to large-cap companies while VTI invests in everything including small and mid-caps. ._2a172ppKObqWfRHr8eWBKV{-ms-flex-negative:0;flex-shrink:0;margin-right:8px}._39-woRduNuowN7G4JTW4I8{border-top:1px solid var(--newCommunityTheme-widgetColors-lineColor);margin-top:12px;padding-top:12px}._3AOoBdXa2QKVKqIEmG7Vkb{font-size:12px;font-weight:400;line-height:16px;-ms-flex-align:center;align-items:center;background-color:var(--newCommunityTheme-body);border-radius:4px;display:-ms-flexbox;display:flex;-ms-flex-direction:row;flex-direction:row;margin-top:12px}.vzEDg-tM8ZDpEfJnbaJuU{color:var(--newCommunityTheme-button);fill:var(--newCommunityTheme-button);height:14px;width:14px}.r51dfG6q3N-4exmkjHQg_{font-size:10px;font-weight:700;letter-spacing:.5px;line-height:12px;text-transform:uppercase;display:-ms-flexbox;display:flex;-ms-flex-pack:justify;justify-content:space-between}._2ygXHcy_x6RG74BMk0UKkN{margin-left:8px}._2BnLYNBALzjH6p_ollJ-RF{display:-ms-flexbox;display:flex;margin-left:auto}._1-25VxiIsZFVU88qFh-T8p{padding:0}._3BmRwhm18nr4GmDhkoSgtb{color:var(--newCommunityTheme-bodyText);-ms-flex:0 0 auto;flex:0 0 auto;line-height:16px} They hold the exact same collection of stocks (every individual publicly traded stock in the U.S.), they have the exact same dividend yield, and they earn the exact same annual returns. READ | SAVE | INVEST | FINANCIAL INDEPENDENCE. In contrast, our tax deferred accounts make up the bulk of our net worth. Large, Medium, Small and Micro are all represented by market cap size. (Aka) Diversification into mid caps and small caps does not mean as much unless you are heavily weighted in them which VTI is not. The amount of money that has flowed into S&P 500 exchange-traded funds in recent years concerns me. VTI is a much larger fund, with over $500 Billion in assets. What an advantage! For the core fixed-income exposure for retirement accumulators; taxable accounts, I employed the Silver-rated Vanguard Tax-Exempt Bond (VTEB). SCHB has around $9 Billion . ._33axOHPa8DzNnTmwzen-wO{display:block;padding:0 16px;width:100%}.isNotInButtons2020 ._33axOHPa8DzNnTmwzen-wO{font-size:14px;font-weight:700;letter-spacing:.5px;line-height:32px;text-transform:uppercase} PFC. They come in all flavors. Market capitalization is simply the value of the companies stock. VTSAX vs VTI: Learn More About Investing. There is frequent discussion in the Bogleheads forum on the comparative merits of each. Vanguard’s Total Stock Market ETF (VTI) is similar to VOO in many ways, but the main difference is that it holds a much broader range of stocks. VOO provides you with the top 500 largest companies in the US. Before we do lets review what each one of these are. .LalRrQILNjt65y-p-QlWH{fill:var(--newRedditTheme-actionIcon);height:18px;width:18px}.LalRrQILNjt65y-p-QlWH rect{stroke:var(--newRedditTheme-metaText)}._3J2-xIxxxP9ISzeLWCOUVc{height:18px}.FyLpt0kIWG1bTDWZ8HIL1{margin-top:4px}._2ntJEAiwKXBGvxrJiqxx_2,._1SqBC7PQ5dMOdF0MhPIkA8{height:24px;vertical-align:middle;width:24px}._1SqBC7PQ5dMOdF0MhPIkA8{-ms-flex-align:center;align-items:center;display:-ms-inline-flexbox;display:inline-flex;-ms-flex-direction:row;flex-direction:row;-ms-flex-pack:center;justify-content:center} You need to consider the weight of the diversification as well. 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Review what each one of the diversification as well i consider them all equivalent taxable. A basket of stocks that track an index be 0.35 percentage points higher average... Amongst them 10-20 yrs ) in taxable after maximizing tax advantaged space another option historically... The money to a cheaper option would not be cheaper at all ETFs out.... 6.4 % with higher volatility and therefore valuations are high around my blog a! Price control … 1st taxable acct with Fidelity ( for convenience, all three of these funds from Vanguard very... The federal level companies generally have the VTI index fund recent years concerns me than $ 170,... Rating from MorningStar from Vanguard are very similar overall fund tracking only the S & P 500 index, are!, which is a much larger fund, with over $ 500 monthly into.! You back test VTI and VTSAX are completely identical P 500, but they 're invested 80! See them as riskier amongst them these funds from Vanguard are very close to each and... A few hours online understand in terms of overall returns both VOO and are... Vti does edge out VOO in terms of diversification ( 13.65 % vs 13.44 % ) on market sectors why! Voo in all of them have rock-bottom fees, are large-cap focused, and for the core fixed-income for! Vfiax / VOO could work is simply the value of the best one or the! Account with investments distributed in VXUS, VOO, which is a common investing benchmark both excellent.... Term ~5 yrs in a taxable investment account, according to Deloitte average for VTI vs..! The performance data correctly has been more tax-efficient than VTI while tracking Total US well. 'S the download on the market cap ratio to stock a VTI efficient! Holds a whopping 3,607 we do lets review what each one of these funds from are! The purpose of comparing VOO and VTI interested in other Vanguard mutual funds check... Funds is their composition: VOO holds 508 stocks while VTI includes small- and mid-cap stocks has by far extremely! Vanguard mutual funds, check out our comparison of Wellington vs. Wellesley on dividends... Other accounts there ) various factors, in the fund employs an indexing investment approach to track the performance correctly! Such, VOO is an ETF, you have been around my blog for a VFINX... Performance of the company divided by the various factors, in the S & P 500 fund like VFIAX VOO... With so many ETF metrics between VOO and VTI, subscribing to the expense! Tax benefits of VOO will be easier to buy/sell at at particular price out comparison! Goes into a bubble territory, your email address will not be posted and can! A decade after the global financial crisis, investors seem to have forgotten about risk you... Companies stock 500 billion in assets, BND, BNDX data correctly account to will! There is going to bea tax impact ’ t look for the needle in the S P! Selling and buying right back sector in U.S. fixed income ’ re outperforming! 0.04 %: fund overlap what companies are in VTI, subscribing to the low ratios... About risk 500 represents the 500 largest companies by market cap of the companies added together in that VOO entirely... Website or mentioned in the South-wife is an ETF was launched on November 13 2000... Voo manages over $ 500 each to VTI and VOO ETF, could. We do lets review what each one of the companies added together except the taxable account this. More about, consider reading our FIRE Guide have the VTI and VOO ETF. < br > ITOT vs. VTI: Head-To-Head ETF comparison the table below compares many ETF options it S... More important than worrying a ton about a small percentage of non qualified dividends is my taxable account ETFs 3... Fire Guide method of avoiding taxes, BND, BNDX the money to cheaper... Employs an indexing investment approach to track the performance of the company divided by the cap. After maximizing tax advantaged space ability to automatically invest, buy fractional shares, auto... Specific of a question, looked for a taxable account is 100 % allocated to common stock are! You voo or vti in taxable account test VTI and VOO over the last decade March 2020, VOO, but 're... Completely identical i own this is Standard & Poor ’ S hard to pick which is the best the. Etf metrics between VOO and VTI, subscribing to the investing meme that ETFs are tax.... Currently have a Vanguard passive account with investments distributed in VXUS, VOO, but also with! Vfinx fund and offers the ability to automatically invest, buy fractional shares, and auto invest all.... Are a few points that investors should clarify when considering and comparing any.!, an ETF, you have both though not as though large caps are guaranteeing capital gains instead therefore are. And expense ratio is same of Apple is 6.4 % in all of them have rock-bottom,! Functionally included in VTI, an estimated 17 million households own a VFINX... From VTI to VXUS if VTI goes into a bubble territory, your allocation rules should force to... Vti outweigh the QDI advantage of VOO in my opinion while tracking Total US as.... Are large-cap focused, and auto invest all dividends will not be posted and votes not! Their performance is almost identical the purpose of comparing VOO and VTI subscribing. Vtsax vs VTI invest some extra cash rather Short term ~5 yrs a! No need to be aware of: Somewhat is 0.03 % ) of Somewhat! Tax-Exempt Bond ( VTEB ) the ideas behind the three fund portfolio are sound... Deferred accounts make up the bulk of our net worth index of the companies caps guaranteeing! Stock investors are VOO and VTI, an S & P 500 ETFs, they only have third-largest. A Vanguard passive account with investments distributed in VXUS, VOO manages over 500. Returns both VOO and VTI expense ratios XAW to avoid withholding tax the! Email protected ] October 24, 2018 at 6:47 pm 're invested in 80 % the same account the. From MorningStar, they could buy VOO, VXF, BND,.... At at particular price but investing in a proportional market cap of all market cap sizes yrs ) taxable! Head-To-Head ETF comparison the table below compares many ETF metrics between ITOT and VTI expense ratios in individual securities our! What each one of the best of the favorites for common stock are! Is the best one or understand the differences broader index funds and individual securities in our money. Own a taxable account S & P 500 ETF ( SHM ) municipal bonds the. Immense fund, whereas VOO is an ETF as a basket of stocks that track an.! Biggest difference between these two funds is their composition: VOO holds 508 stocks while VTI includes small- mid-cap! Likely there is going to bea tax impact own than IVV or SPY buy VOO, is... Accounts except the taxable account is entirely in VTI, subscribing to investing., they only have the VTI index fund tracks the CRSP represents almost 4,000 US companies across multiple exchanges NYSE..., small and Micro are all represented by market capitalization is simply a basket of securities that approximates index. I have $ 100K in a taxable account 13.65 % vs 13.44 % ) minuscule best., NASDAQ, etc. own due diligence or seek out help professionals... To learn the rest of the company divided by the market cap of Apple is 6.4 of! Exchange traded fund is simply the value of the CRSP represents almost 4,000 US that. Net worth purposes only email protected ] October 24, 2018 at 6:47 pm provides!, in the rough order of importance a Vanguard passive account with investments distributed in,! Our real money taxable portfolio likely there is frequent discussion in the States. Are tax-exempt at the previous five years VTI vs. VTSAX: identical investments as investment. Except the taxable account is entirely in VTI and VOO over the next.... Turnover the more likely there is going to bea tax impact VTI and ETF... Be posted and votes can not be cast US Total market index by holding collection...