VTI vs VOO: An Expert’s Opinion

The Vanguard S&P 500 Index ETF (VOO) and the Vanguard Total Stock Market ETF (VTI) are two of the largest ETFs and both are sponsored by Vanguard. VOO and VTI are a core holding of many investor portfolios and many investors compare VOO vs VTI in order to decide which should be the foundation of their portfolio.

The Short Answer

The biggest difference between VOO and VTI is that VOO is a large- and mid-cap ETF, while VTI is a “total market fund” which includes more mid-caps and small-caps. Despite these differences, the risk and return between these two funds is nearly identical and I consider them interchangeable.

A quick reminder that this site does NOT provide investment recommendations. Fund comparisons (such as this one) are not conducted to identify the “best” fund (since that will vary from investor to investor based on investor-specific factors). Rather, these fund comparison posts are designed to identify and distinguish between the fund details that matter versus the ones that don’t.

The Long Answer

Historical Performance: VTI vs VOO

VTI was launched on May 24, 2001, while VOO was launched on September 7, 2010. Since then, VOO has outperformed by .24% annually. This has been primarily driven by large-caps’ relative outperformance during this time period, although that dynamic could reverse in the future. That being said, the performance between these two funds is extremely close and shows that modest differences in market cap exposure does not impact total returns that much. The cumulative performance differential over the past 12 years is only about 12%.

Differences between VTI vs VOO

The biggest difference between VOO and VTI is the market cap exposure of the funds. VOO tracks the S&P 500 index which includes mostly large-caps and some mid-caps. VTI tracks the CRSP US Total Market Index which covers much more of the market by including more mid-caps and small-caps.

Geographic Exposure

Both VOO and VTI hold essentially 100% stocks, so I will not dig into country exposures or market classification here. For all intents and purposes, the two funds have identical exposures.

Market Cap Exposure

VOO tracks the S&P 500 index and so it mostly holds large-caps with a bit of mid-cap exposure. VTI tracks the broader S&P Total Market Index and so it owns many more mid-caps and small-caps. In other words, VOO is a large-cap vehicle and VTI is a total market vehicle. That being said, due to market cap weighting, both funds are overwhelmingly influenced by the large-cap holdings.

VOOVTI
Large-Cap84%73%
Mid-Cap16%19%
Small-Cap0%8%
Source: ThoughtfulFinance.com, Morningstar; data as of 12/31/2022

Sector Weights

The sector weights between VOO and VTI are nearly identical.

VOOVTI
Basic Materials2.46%2.65%
Consumer Cyclical9.57%9.77%
Financial Services13.84%13.93%
Real Estate2.80%3.51%
Communication Services7.28%6.71%
Energy5.23%5.15%
Industrials9.06%10.07%
Technology23.04%22.48%
Consumer Defensive7.61%6.98%
Healthcare15.92%15.69%
Utilities3.19%3.07%
Source: ThoughtfulFinance.com, Morningstar; data as of 12/31/2022

Expenses

The expense ratio for both funds is .03%, which extremely low.

Transaction Costs

ETFs are free to trade at many brokers and custodians, so both VOO and VTI should be free to trade in most cases. Additionally, these funds are among the largest ETFs and are very liquid. The bid-ask spread of both VOO and VTI is about .01%, so individual investor trades will not generally be large enough to “move” the market.

Tax Efficiency & Capital Gain Distributions

ETFs are typically more tax-efficient than mutual funds, due to their ability to avoid realizing capital gains through like-kind redemptions (a process that is beyond the scope of this post). As expected, neither VTI nor VOO has ever made a capital gains distribution (nor do I expect them to). Thus, these funds are about as tax-efficient as any fund can be and either fund is appropriate in taxable accounts.

Final Thoughts: VTI vs VOO

Both VOO and VTI are large, core funds sponsored and managed by Vanguard, one of the largest investment sponsors in the world. Although VOO is more of a large-cap ETF and VTI is a total market ETF, performance has been extremely similar.

I view these two funds as essentially interchangeable and would not spend too much energy splitting hairs to decide which one is “better” (unless one has a clear view on whether larger caps or smaller caps will perform better in the future and even then the difference won’t be much)! In my opinion, both funds are among the best ETFs out there and investors cannot really go wrong with either.

SWPPX vs SCHX

The Schwab S&P 500 Index Fund (SWPPX) and the Schwab Large Cap ETF (SCHX) are two of the largest index mutual funds in existence and easily two of the most popular among individual investors. Both SWPPX and SCHX are large-cap index funds and form the core of many investor portfolios. Many investors compare SWPPX vs SCHX in order to decide which should be the foundation of their portfolio.

A quick reminder that this site does NOT provide investment recommendations. Fund comparisons (such as this one) are not conducted to identify the “best” fund (since that will vary from investor to investor based on investor-specific factors). Rather, these fund comparison posts are designed to identify and distinguish between the fund details that matter versus the ones that don’t.

The Short Answer

The main difference is that SWPPX is a mutual fund and SCHX is an ETF; however investors should consider several other factors when deciding which is best. The two funds technically track different indices, but the indices and funds are identical for all intents and purposes.

The Long Answer

Historical Performance: SWPPX vs SCHX

SWPPX was launched back in 1997, while SCHX was launched in late 2009. Since then the two funds have performed identically, with a difference of just .06% annually! The cumulative performance difference between these two funds has been just over 3% (over a 13 year timeframe)! Thus, from a performance perspective, I would consider these two funds interchangeable.

Differences between SWPPX vs SCHX

Although SWPPX tracks the S&P 500 and SCHX tracks the Dow Jones US Large Cap Total Stock Market Index, the two indices and funds are identical for all intents and purposes. A quick glance at the above chart is sufficient to understand this, so I won’t bore readers by digging into country, sector, and market cap exposures.

Factors to Consider

Transaction Costs

ETFs are free to trade at many brokers and custodians, including Schwab. However, many brokers and custodians still charge commissions and/or transaction fees to buy/sell mutual funds. To my knowledge, Schwab does not participate in the pay-to-play arrangements (with their competitor custodians) that would allow their mutual funds to trade for free on many platforms. So if an investor account is at Schwab, it is generally free to trade SWPPX or SCHX. However, only SCHX is free to trade in many non-Schwab accounts.

There is a bid-ask spread when trading ETFs, but this spread is typically less than .01% for SCHX and individual investor trades will not generally be large enough to “move” the market. In the case of SCHX, individual investors should not have a problem trading.

Tax Efficiency & Capital Gain Distributions

ETFs are typically more tax-efficient than mutual funds, due to their ability to avoid realizing capital gains through like-kind redemptions (a process that is beyond the scope of this post). As expected, SCHX is more tax-efficient.

SWPPX has made capital gains distributions in the past and I would expect this to continue in future. SCHX has never paid out a capital gain distribution, nor do I expect it to in the future. Thus, tax-sensitive investors may want to consider whether ETFs make more sense for them.

Tax Loss Harvesting

My personal preference is to keep a portfolio entirely mutual funds or entirely ETFs, due to the mechanics of settlement during tax loss harvesting. If an ETF has declined in value and an investor sells it, the trade and cash proceeds will not settle for two business days (T+2). That investor may want to “replace” the sold ETF immediately and attempt to buy another ETF or mutual fund simultaneously.

However, mutual funds settle on T+1 basis, so cash for the mutual purchase would be due in one business day (which is one day earlier than the cash from the ETF sale is received). This can obviously cause problems and (even though this issue can be addressed with careful planning) I find it easier to keep accounts invested in similar vehicles. In this case, if a portfolio is all mutual funds, I might lean more towards SWPPX. If all ETFs, I might lean more towards SCHX.

On this topic, investors may want to avoid using these two funds as tax loss harvesting substitutes for one another since they could be considered “substantially identical.”

Tradability

SWPPX does not have a stated minimum for purchases, although some brokerages (especially competitors of Schwab) impose minimums. The minimum purchase size for SCHX is typically one share, although fractional shares are becoming more common. Investors can trade ETFs intraday, as well as in the pre-market and after-hours trading sessions. Investors can only buy/sell mutual funds once per day. This is not necessarily a major factor for long-term investors however.

Final Thoughts: SWPPX vs SCHX

Both SWPPX and SCHX are large, core funds sponsored and managed by Schwab. Performance has been nearly identical. I view SWPPX and SCHX as essentially interchangeable and would not spend too much energy trying to decide which one is “better.”

However, there are some situations that may call for one fund versus another. For instance, many custodians offer free ETF trades, but charge trading fees or redemption fees for mutual funds. So I might select SWPPX or SCHX solely based on where my account is held or whether I’m investing taxable vs retirement dollars. Despite these considerations, these two funds are very similar for all intents and purposes.

VFIAX vs IVV

The Vanguard S&P 500 Index Fund (VFIAX) and the Blackrock/iShares S&P 500 ETF (IVV) are two of the largest index mutual funds in existence and easily two of the most popular among individual investors. Both VFIAX and IVV track the well-known S&P 500 index and form the core of many investor portfolios. Many investors compare VFIAX vs IVV in order to decide which should be the foundation of their portfolio.

The Short Answer

The main difference is that VFIAX is a mutual fund and IVV is an ETF; however investors should consider several other factors when deciding which is best.

A quick reminder that this site does NOT provide investment recommendations. Fund comparisons (such as this one) are not conducted to identify the “best” fund (since that will vary from investor to investor based on investor-specific factors). Rather, these fund comparison posts are designed to identify and distinguish between the fund details that matter versus the ones that don’t.

The Long Answer

Historical Performance: VFIAX vs IVV

IVV was launched back in 2000, while VFIAX was launched a year later in late 2000. Since their common inception date, the two funds have performed nearly identically, with a difference of just .03% annually! The cumulative performance difference between these two funds has only been about 2.5% (over a 22 year timeframe)! Thus, from a performance perspective, I would consider these two funds interchangeable.

Differences between VFIAX vs IVV

Both VFIAX and IVV track the S&P 500, so I will not delve into differences in geographic exposures, sector weights, or market cap coverage. For all intents and purposes, the portfolios are identical with 504 stocks each. The S&P 500 has more than 500 stocks because of the index constituents have multiple share classes of stock (such as GOOG and GOOGL).

Factors to Consider

Transaction Costs

ETFs are free to trade at many brokers and custodians, including Vanguard. However, many brokers and custodians still charge commissions and/or transaction fees to buy/sell mutual funds. To my knowledge, Vanguard does not participate in the pay-to-play arrangements (with their competitor custodians) that would allow their mutual funds to trade for free on many platforms. So if an investor account is at Vanguard, it is generally free to trade VFIAX or IVV. However, only IVV is free to trade in many non-Vanguard accounts.

There is a bid-ask spread when trading ETFs, but this spread is typically less than .01% for IVV and individual investor trades will not generally be large enough to “move” the market. In the case of IVV, individual investors should not have a problem trading.

Tax Efficiency & Capital Gain Distributions

ETFs are typically more tax-efficient than mutual funds, due to their ability to avoid realizing capital gains through like-kind redemptions (a process that is beyond the scope of this post). However, many Vanguard mutual funds (including VFIAX) have an ETF share class that allows the mutual fund portfolio to enjoy the tax benefits of ETFs. So, in this case, VFIAX and IVV are equivalent in terms of tax-efficiency.

Tax Loss Harvesting

My personal preference is to keep a portfolio entirely mutual funds or entirely ETFs, due to the mechanics of settlement during tax loss harvesting. If an ETF has declined in value and an investor sells it, the trade and cash proceeds will not settle for two business days (T+2). That investor may want to “replace” the sold ETF immediately and attempt to buy another ETF or mutual fund simultaneously.

However, mutual funds settle on T+1 basis, so cash for the mutual purchase would be due in one business day (which is one day earlier than the cash from the ETF sale is received). This can obviously cause problems and (even though this issue can be addressed with careful planning) I find it easier to keep accounts invested in similar vehicles. In this case, if a portfolio is all mutual funds, I might lean more towards VFIAX. If all ETFs, I might lean more towards IVV.

On this topic, investors may want to avoid using these two funds as tax loss harvesting substitutes for one another since they could be considered “substantially identical.”

Tradability

VFIAX does not have a stated minimum for purchases, although some brokerages (especially competitors of Vanguard) impose minimums. The minimum purchase size for IVV is typically one share, although fractional shares are becoming more common. Investors can trade ETFs intraday, as well as in the pre-market and after-hours trading sessions. Investors can only buy/sell mutual funds once per day. This is not necessarily a major factor for long-term investors however.

Final Thoughts: VFIAX vs IVV

Both VFIAX and IVV are large, core funds sponsored and managed by Vanguard and Blackrock’s iShares respectively. Performance has been nearly identical. I view VFIAX and IVV as essentially interchangeable and would not spend too much energy trying to decide which one is “better.”

However, there are some situations that may call for one fund versus another. For instance, many custodians offer free ETF trades, but charge trading fees or redemption fees for mutual funds. So I might select VFIAX or IVV solely based on where my account is held or whether I’m investing taxable vs retirement dollars. Despite these considerations, these two funds are very similar for all intents and purposes.

VFIAX vs SPY: Comparison by an expert

The Vanguard S&P 500 Index Fund (VFIAX) and the State Street S&P 500 ETF (SPY) are two of the largest index mutual funds in existence and easily two of the most popular among individual investors. Both VFIAX and SPY track the well-known S&P 500 index and form the core of many investor portfolios. Many investors compare VFIAX vs SPY in order to decide which should be the foundation of their portfolio.

The Short Answer

The main difference is that VFIAX is a mutual fund and SPY is an ETF; however investors should consider several other factors when deciding which is best.

A quick reminder that this site does NOT provide investment recommendations. Fund comparisons (such as this one) are not conducted to identify the “best” fund (since that will vary from investor to investor based on investor-specific factors). Rather, these fund comparison posts are designed to identify and distinguish between the fund details that matter versus the ones that don’t.

The Long Answer

Historical Performance: VFIAX vs SPY

SPY was launched back in 1993, while VFIAX was launched a few years later in late 2000. Since their common inception date, the two funds have performed nearly identically, with a difference of just .07% annually! The cumulative performance difference between these two funds has been about 5% (over a 22 year timeframe)! Thus, from a performance perspective, I would consider these two funds interchangeable.

Differences between VFIAX vs SPY

Both VFIAX and SPY track the S&P 500, so I will not delve into differences in geographic exposures, sector weights, or market cap coverage. For all intents and purposes, the portfolios are identical with 504 stocks each. The S&P 500 has more than 500 stocks because of the index constituents have multiple share classes of stock (such as GOOG and GOOGL).

Factors to Consider

Transaction Costs

ETFs are free to trade at many brokers and custodians, including Vanguard. However, many brokers and custodians still charge commissions and/or transaction fees to buy/sell mutual funds. To my knowledge, Vanguard does not participate in the pay-to-play arrangements (with their competitor custodians) that would allow their mutual funds to trade for free on many platforms. So if an investor account is at Vanguard, it is generally free to trade VFIAX or SPY. However, only SPY is free to trade in many non-Vanguard accounts.

There is a bid-ask spread when trading ETFs, but this spread is typically less than .01% for SPY and individual investor trades will not generally be large enough to “move” the market. In the case of SPY, individual investors should not have a problem trading.

Tax Efficiency & Capital Gain Distributions

ETFs are typically more tax-efficient than mutual funds, due to their ability to avoid realizing capital gains through like-kind redemptions (a process that is beyond the scope of this post). However, many Vanguard mutual funds (including VFIAX) have an ETF share class that allows the mutual fund portfolio to enjoy the tax benefits of ETFs. So, in this case, VFIAX and SPY are equivalent in terms of tax-efficiency.

Tax Loss Harvesting

My personal preference is to keep a portfolio entirely mutual funds or entirely ETFs, due to the mechanics of settlement during tax loss harvesting. If an ETF has declined in value and an investor sells it, the trade and cash proceeds will not settle for two business days (T+2). That investor may want to “replace” the sold ETF immediately and attempt to buy another ETF or mutual fund simultaneously.

However, mutual funds settle on T+1 basis, so cash for the mutual purchase would be due in one business day (which is one day earlier than the cash from the ETF sale is received). This can obviously cause problems and (even though this issue can be addressed with careful planning) I find it easier to keep accounts invested in similar vehicles. In this case, if a portfolio is all mutual funds, I might lean more towards VFIAX. If all ETFs, I might lean more towards SPY.

On this topic, investors may want to avoid using these two funds as tax loss harvesting substitutes for one another since they could be considered “substantially identical.”

Tradability

VFIAX does not have a stated minimum for purchases, although some brokerages (especially competitors of Vanguard) impose minimums. The minimum purchase size for SPY is typically one share, although fractional shares are becoming more common. Investors can trade ETFs intraday, as well as in the pre-market and after-hours trading sessions. Investors can only buy/sell mutual funds once per day. This is not necessarily a major factor for long-term investors however.

Final Thoughts: VFIAX vs SPY

Both VFIAX and SPY are large, core funds sponsored and managed by Vanguard and State Street respectively. Performance has been nearly identical. I view VFIAX and SPY as essentially interchangeable and would not spend too much energy trying to decide which one is “better.”

However, there are some situations that may call for one fund versus another. For instance, many custodians offer free ETF trades, but charge trading fees or redemption fees for mutual funds. So I might select VFIAX or SPY solely based on where my account is held or whether I’m investing taxable vs retirement dollars. Despite these considerations, these two funds are very similar for all intents and purposes.

SWPPX vs SPY: Comparison by an expert

The Schwab S&P 500 Index Fund (SWPPX) and the State Street S&P 500 ETF (SPY) are two of the largest index mutual funds in existence and easily two of the most popular among individual investors. Both SWPPX and SPY track the well-known S&P 500 index and form the core of many investor portfolios. Many investors compare SWPPX vs SPY in order to decide which should be the foundation of their portfolio.

The Short Answer

The main difference is that SWPPX is a mutual fund and SPY is an ETF; however investors should consider several other factors when deciding which is best.

A quick reminder that this site does NOT provide investment recommendations. Fund comparisons (such as this one) are not conducted to identify the “best” fund (since that will vary from investor to investor based on investor-specific factors). Rather, these fund comparison posts are designed to identify and distinguish between the fund details that matter versus the ones that don’t.

The Long Answer

Historical Performance: SWPPX vs SPY

SPY was launched back in 1993, while SWPPX was launched a few years later in 1997. Since their common inception date, the two funds have performed identically, with a difference of just .01% annually! The cumulative performance difference between these two funds has been under 1% (over a 25 year timeframe)! Thus, from a performance perspective, I would consider these two funds interchangeable.

Differences between SWPPX vs SPY

Both SWPPX and SPY track the S&P 500, so I will not delve into differences in geographic exposures, sector weights, or market cap coverage. For all intents and purposes, the portfolios are identical with 504 stocks each. The S&P 500 has more than 500 stocks because of the index constituents have multiple share classes of stock (such as GOOG and GOOGL).

Factors to Consider

Transaction Costs

ETFs are free to trade at many brokers and custodians, including Schwab. However, many brokers and custodians still charge commissions and/or transaction fees to buy/sell mutual funds. To my knowledge, Schwab does not participate in the pay-to-play arrangements (with their competitor custodians) that would allow their mutual funds to trade for free on many platforms. So if an investor account is at Schwab, it is generally free to trade SWPPX or SPY. However, only SPY is free to trade in many non-Schwab accounts.

There is a bid-ask spread when trading ETFs, but this spread is typically less than .01% for SPY and individual investor trades will not generally be large enough to “move” the market. In the case of SPY, individual investors should not have a problem trading.

Tax Efficiency & Capital Gain Distributions

ETFs are typically more tax-efficient than mutual funds, due to their ability to avoid realizing capital gains through like-kind redemptions (a process that is beyond the scope of this post). As expected, SPY is more tax-efficient.

SWPPX has made capital gains distributions in the past and I would expect this to continue in future. SPY has not paid out a capital gain distribution since 1996, nor do I expect it to in the future. Thus, tax-sensitive investors may want to consider whether ETFs make more sense for them.

Tax Loss Harvesting

My personal preference is to keep a portfolio entirely mutual funds or entirely ETFs, due to the mechanics of settlement during tax loss harvesting. If an ETF has declined in value and an investor sells it, the trade and cash proceeds will not settle for two business days (T+2). That investor may want to “replace” the sold ETF immediately and attempt to buy another ETF or mutual fund simultaneously.

However, mutual funds settle on T+1 basis, so cash for the mutual purchase would be due in one business day (which is one day earlier than the cash from the ETF sale is received). This can obviously cause problems and (even though this issue can be addressed with careful planning) I find it easier to keep accounts invested in similar vehicles. In this case, if a portfolio is all mutual funds, I might lean more towards SWPPX. If all ETFs, I might lean more towards SPY.

On this topic, investors may want to avoid using these two funds as tax loss harvesting substitutes for one another since they could be considered “substantially identical.”

Tradability

SWPPX does not have a stated minimum for purchases, although some brokerages (especially competitors of Schwab) impose minimums. The minimum purchase size for SPY is typically one share, although fractional shares are becoming more common. Investors can trade ETFs intraday, as well as in the pre-market and after-hours trading sessions. Investors can only buy/sell mutual funds once per day. This is not necessarily a major factor for long-term investors however.

Final Thoughts: SWPPX vs SPY

Both SWPPX and SPY are large, core funds sponsored and managed by Schwab and State Street respectively. Performance has been nearly identical. I view SWPPX and SPY as essentially interchangeable and would not spend too much energy trying to decide which one is “better.”

However, there are some situations that may call for one fund versus another. For instance, many custodians offer free ETF trades, but charge trading fees or redemption fees for mutual funds. So I might select SWPPX or SPY solely based on where my account is held or whether I’m investing taxable vs retirement dollars. Despite these considerations, these two funds are very similar for all intents and purposes.

SWPPX vs IVV: Comparison by an expert

The Schwab S&P 500 Index Fund (SWPPX) and the Blackrock/iShares S&P 500 Index Fund (IVV) are two of the largest index mutual funds in existence and easily two of the most popular among individual investors. Both SWPPX and IVV track the well-known S&P 500 index and form the core of many investor portfolios. Many investors compare SWPPX vs IVV in order to decide which should be the foundation of their portfolio.

The Short Answer

The main difference is that SWPPX is a mutual fund and IVV is an ETF; however investors should consider several other factors when deciding which is best.

A quick reminder that this site does NOT provide investment recommendations. Fund comparisons (such as this one) are not conducted to identify the “best” fund (since that will vary from investor to investor based on investor-specific factors). Rather, these fund comparison posts are designed to identify and distinguish between the fund details that matter versus the ones that don’t.

The Long Answer

Historical Performance: SWPPX vs IVV

SWPPX was launched back in 1997, while IVV was launched in May 2000. Since then the two funds have performed identically, with a difference of just .01% annually! The cumulative performance difference between these two funds has been just over .4% (over a 23 year timeframe)! Thus, from a performance perspective, I would consider these two funds interchangeable.

Differences between SWPPX vs IVV

Both SWPPX and IVV track the S&P 500, so I will not delve into differences in geographic exposures, sector weights, or market cap coverage. For all intents and purposes, the portfolios are identical with 504 stocks each. The S&P 500 has more than 500 stocks because of the index constituents have multiple share classes of stock (such as GOOG and GOOGL).

Factors to Consider

Transaction Costs

ETFs are free to trade at many brokers and custodians, including Schwab. However, many brokers and custodians still charge commissions and/or transaction fees to buy/sell mutual funds. To my knowledge, Schwab does not participate in the pay-to-play arrangements (with their competitor custodians) that would allow their mutual funds to trade for free on many platforms. So if an investor account is at Schwab, it is generally free to trade SWPPX or IVV. However, only IVV is free to trade in many non-Schwab accounts.

There is a bid-ask spread when trading ETFs, but this spread is typically less than .01% for IVV and individual investor trades will not generally be large enough to “move” the market. In the case of IVV, individual investors should not have a problem trading.

Tax Efficiency & Capital Gain Distributions

ETFs are typically more tax-efficient than mutual funds, due to their ability to avoid realizing capital gains through like-kind redemptions (a process that is beyond the scope of this post). As expected, IVV is more tax-efficient.

SWPPX has made capital gains distributions in the past and I would expect this to continue in future. IVV has never paid out a capital gain distribution, nor do I expect it to in the future. Thus, tax-sensitive investors may want to consider whether ETFs make more sense for them.

Tax Loss Harvesting

My personal preference is to keep a portfolio entirely mutual funds or entirely ETFs, due to the mechanics of settlement during tax loss harvesting. If an ETF has declined in value and an investor sells it, the trade and cash proceeds will not settle for two business days (T+2). That investor may want to “replace” the sold ETF immediately and attempt to buy another ETF or mutual fund simultaneously.

However, mutual funds settle on T+1 basis, so cash for the mutual purchase would be due in one business day (which is one day earlier than the cash from the ETF sale is received). This can obviously cause problems and (even though this issue can be addressed with careful planning) I find it easier to keep accounts invested in similar vehicles. In this case, if a portfolio is all mutual funds, I might lean more towards SWPPX. If all ETFs, I might lean more towards IVV.

On this topic, investors may want to avoid using these two funds as tax loss harvesting substitutes for one another since they could be considered “substantially identical.”

Tradability

SWPPX does not have a stated minimum for purchases, although some brokerages (especially competitors of Schwab) impose minimums. The minimum purchase size for IVV is typically one share, although fractional shares are becoming more common. Investors can trade ETFs intraday, as well as in the pre-market and after-hours trading sessions. Investors can only buy/sell mutual funds once per day. This is not necessarily a major factor for long-term investors however.

Final Thoughts: SWPPX vs IVV

Both SWPPX and IVV are large, core funds sponsored and managed by Schwab and Blackrock’s iShares respectively. Performance has been nearly identical. I view SWPPX and IVV as essentially interchangeable and would not spend too much energy trying to decide which one is “better.”

However, there are some situations that may call for one fund versus another. For instance, many custodians offer free ETF trades, but charge trading fees or redemption fees for mutual funds. So I might select SWPPX or IVV solely based on where my account is held or whether I’m investing taxable vs retirement dollars. Despite these considerations, these two funds are very similar for all intents and purposes.

SWPPX vs VOO: Comparison by an expert

The Schwab S&P 500 Index Fund (SWPPX) and the Vanguard S&P 500 Index Fund (VOO) are two of the largest index mutual funds in existence and easily two of the most popular among individual investors. Both SWPPX and VOO track the well-known S&P 500 index and form the core of many investor portfolios. Many investors compare SWPPX vs VOO in order to decide which should be the foundation of their portfolio.

The Short Answer

The main difference is that SWPPX is a mutual fund and VOO is an ETF; however investors should consider several other factors when deciding which to use.

A quick reminder that this site does NOT provide investment recommendations. Fund comparisons (such as this one) are not conducted to identify the “best” fund (since that will vary from investor to investor based on investor-specific factors). Rather, these fund comparison posts are designed to identify and distinguish between the fund details that matter versus the ones that don’t.

The Long Answer

Historical Performance: SWPPX vs VOO

SWPPX was launched back in 1997, while VOO was launched on September 7, 2010. Since then the two funds have performed identically, with a difference of just .03% annually! The cumulative performance difference between these two funds has been just over 1.4% (over a dozen year timeframe)! Thus, from a performance perspective, I would consider these two funds interchangeable.

Differences between SWPPX vs VOO

Both SWPPX and VOO track the S&P 500, so I will not delve into differences in geographic exposures, sector weights, or market cap coverage. For all intents and purposes, the portfolios are identical with 504 stocks each. The S&P 500 has more than 500 stocks because of the index constituents have multiple share classes of stock (such as GOOG and GOOGL).

Factors to Consider

Transaction Costs

ETFs are free to trade at many brokers and custodians, including Schwab. However, many brokers and custodians still charge commissions and/or transaction fees to buy/sell mutual funds. To my knowledge, Schwab does not participate in the pay-to-play arrangements (with their competitor custodians) that would allow their mutual funds to trade for free on many platforms. So if an investor account is at Schwab, it is generally free to trade SWPPX or VOO. However, only VOO is free to trade in many non-Schwab accounts.

There is a bid-ask spread when trading ETFs, but this spread is typically less than .01% for VOO and individual investor trades will not generally be large enough to “move” the market. In the case of VOO, individual investors should not have a problem trading.

Tax Efficiency & Capital Gain Distributions

ETFs are typically more tax-efficient than mutual funds, due to their ability to avoid realizing capital gains through like-kind redemptions (a process that is beyond the scope of this post). As expected, VOO is more tax-efficient.

SWPPX has made capital gains distributions in the past and I would expect this to continue in future. VOO has never paid out a capital gain distribution, nor do I expect it to in the future. Thus, tax-sensitive investors may want to consider whether ETFs make more sense for them.

Tax Loss Harvesting

My personal preference is to keep a portfolio entirely mutual funds or entirely ETFs, due to the mechanics of settlement during tax loss harvesting. If an ETF has declined in value and an investor sells it, the trade and cash proceeds will not settle for two business days (T+2). That investor may want to “replace” the sold ETF immediately and attempt to buy another ETF or mutual fund simultaneously.

However, mutual funds settle on T+1 basis, so cash for the mutual purchase would be due in one business day (which is one day earlier than the cash from the ETF sale is received). This can obviously cause problems and (even though this issue can be addressed with careful planning) I find it easier to keep accounts invested in similar vehicles. In this case, if a portfolio is all mutual funds, I might lean more towards SWPPX. If all ETFs, I might lean more towards VOO.

On this topic, investors may want to avoid using these two funds as tax loss harvesting substitutes for one another since they could be considered “substantially identical.”

Tradability

SWPPX does not have a stated minimum for purchases, although some brokerages (especially competitors of Schwab) impose minimums. The minimum purchase size for VOO is typically one share, although fractional shares are becoming more common. Investors can trade ETFs intraday, as well as in the pre-market and after-hours trading sessions. Investors can only buy/sell mutual funds once per day. This is not necessarily a major factor for long-term investors however.

Final Thoughts: SWPPX vs VOO

Both SWPPX and VOO are large, core funds sponsored and managed by Schwab and Vanguard respectively. Performance has been nearly identical. I view SWPPX and VOO as essentially interchangeable and would not spend too much energy trying to decide which one is “better.”

However, there are some situations that may call for one fund versus another. For instance, many custodians offer free ETF trades, but charge trading fees or redemption fees for mutual funds. So I might select SWPPX or VOO solely based on where my account is held or whether I’m investing taxable vs retirement dollars. Despite these considerations, these two funds are very similar for all intents and purposes.

SWPPX vs SWTSX: Comparison by an expert

The Schwab S&P 500 Index mutual fund (SWPPX) and the Schwab Total Stock Market Index mutual fund (SWTSX) are two of the largest mutual funds in existence. Both funds are sponsored and managed by Schwab. SWPPX and SWTSX are the core of many investor portfolios and many investors compare SWPPX vs SWTSX in order to decide which should be the foundation of their portfolio.

A quick reminder that this site does NOT provide investment recommendations. Fund comparisons (such as this one) are not conducted to identify the “best” fund (since that will vary from investor to investor based on investor-specific factors). Rather, these fund comparison posts are designed to identify and distinguish between the fund details that matter versus the ones that don’t.

The Short Answer

The main difference between SWPPX and SWTSX is that SWPPX is a large- and mid-cap fund, while SWTSX is a total market fund. Despite these differences, the risk and return between these two funds is pretty close and I largely consider them interchangeable in a portfolio.

The Long Answer

Historical Performance: SWPPX vs SWTSX

SWPPX was launched on May 19, 1997, while SWTSX was launched a couple years later on June 1, 1999. Since then, SWTSX has outperformed by .35% annually. This is not a huge performance differential, but it does compound over time. The cumulative difference between the two funds since common inception is nearly 37%.

Differences between SWPPX vs SWTSX

The biggest difference between SWPPX and SWTSX is the market cap exposure of the funds. SWPPX tracks the S&P 500 index which includes mostly large-caps and some mid-caps, while SWTSX covers much more of the market by including more mid-caps and small-caps.

Geographic Exposure

Both SWPPX and SWTSX hold essentially 100% stocks, so I will not dig into country exposures or market classification here. For all intents and purposes, the two funds have identical exposures.

Market Cap Exposure

SWPPX focuses on the S&P 500 index and so it mostly holds large-caps with a bit of mid-cap exposure. SWTSX tracks the broader Dow Jones U.S. Total Stock Market Index and so it owns many more mid-caps and small-caps (as of 12/31/2022). In other words, SWPPX is a large-cap vehicle, while SWTSX is a total market vehicle. That being said, due to market cap weighting, both funds are overwhelmingly influenced by the large-cap holdings.

SWPPXSWTSX
Large-Cap83%72%
Mid-Cap16%19%
Small-Cap0%9%
Source: ThoughtfulFinance.com, Morningstar

Sector Weights

The sector weights between SWPPX and SWTSX are nearly identical, as of 12/31/2022. The weights are within 1% for every single sector.

SWPPXSWTSX
Basic Materials2.46%2.65%
Consumer Cyclical9.56%9.86%
Financial Services13.89%14.08%
Real Estate2.81%3.45%
Communication Services7.28%6.74%
Energy5.23%5.20%
Industrials9.06%9.79%
Technology23.02%22.62%
Consumer Defensive7.61%6.95%
Healthcare15.90%15.58%
Utilities3.18%3.04%
Source: ThoughtfulFinance.com, Morningstar

Transaction Costs

Many brokers and custodians still charge commissions and/or transaction fees to buy/sell mutual funds. To my knowledge, Schwab does not participate in the pay-to-play arrangements (with their competitor custodians) that would allow their mutual funds to trade for free on many platforms. So if an investor account is at Schwab, it is generally free to trade SWPPX or SWTSX.

It is worth noting that neither fund has a minimum for initial or additional investments. That being said, investors looking for free trades may want to consider an a total market ETF or large-cap ETF, rather than SWTSX or SWPPX.

Expenses

Some investors may point out that the expense ratios between SWTSX and SWPPX differ. This is true, but it is also reflected in the net performance chart above. At a certain level, differences in expense ratio do not matter that much. In this case, the difference in expenses is fractions of a hundredth of a percent, so no need to compare or split hairs.

Tax Efficiency & Capital Gain Distributions

Both funds have made capital gains distributions in the past and will likely make them in the future. It is not possible to say which one will be more tax-efficient in the future. As index funds, the tax drag on both funds is very low. However, tax-sensitive taxable investors may want to consider using an ETF in lieu of either of these funds.

Final Thoughts: SWPPX vs SWTSX

Both SWPPX and SWTSX are large, core funds sponsored and managed by one of the largest asset managers in the world (Schwab). Beyond market cap exposures, the funds appear and act very similar. Long-term performance has been nearly identical. I view these two funds as essentially interchangeable and would not spend too much energy splitting hairs to decide which one is “better.”

ACWI vs SPGM: Liquidity vs Price

The iShares MSCI All-Country World Index ETF (ACWI) and the iShares Core MSCI All-Country World Index ETF (SPGM) are two popular funds and sponsored by Blackrock’s iShares and State Street SPDRs respectively. ACWI is one of the largest ETFs, while SPGM is quite small. As their names suggest, ACWI and SPGM are a core holding of many portfolios. Many investors compare SPGM vs ACWI in order to decide which should be the foundation of their portfolio.

A quick reminder that this site does NOT provide investment recommendations. Fund comparisons (such as this one) are not conducted to identify the “best” fund (since that will vary from investor to investor based on investor-specific factors). Rather, these fund comparison posts are designed to identify and distinguish between the fund details that matter versus the ones that don’t.

The Short Answer

ACWI and SPGM are nearly identical is most ways, but ACWI is much larger, liquid, and more expensive than SPGM. Deciding between ACWI and SPGM depends on the tradeoffs that an investor is willing to make.

The Longer Answer

These funds are nearly identical in most ways, although ACWI is a much more expensive fund. However, ACWI is much larger and more liquid than SPGM.

ACWI and SPGM track different indices. The older ACWI tracks the large-cap MSCI All-Country World Index Index, while SPGM tracks the MSCI All-Country World Index Investable Market Index (IMI) which owns more mid-caps and small-caps (see our comparison of the indices here).

History of ACWI and SPGM

ACWI was the first All-Country World Index ETF to launch, back in 2008. This first mover advantage gave it an edge in accumulating assets under management (AUM) and became the liquid vehicle of choice for traders. Even as other All-Country World Index ETFs launched and competitors engaged in cutting fees, ACWI was able to command premium fees due to its size and liquidity. Since SPGM and other similar funds have (to date) been unable to raise substantial assets, ACWI has been able to continue charging fees that are multiples of its competitors.

Historical Performance: SPGM vs ACWI

Since SPGM’s launch in October 2012, it has outperformed ACWI by .38% annually! This has mostly been driven by the fee differential, which currently stands at .23%. The cumulative performance over the past 10 years is over 1%. As the below chart illustrates, the two funds move in lockstep, but the ACWI’s performance is degraded by its expenses.

Differences between SPGM vs ACWI

These two funds are nearly identical in every way. Beyond the expenses, the biggest difference between ACWI and SPGM is the market cap exposure of the funds.

Geographic Exposure

The country exposures of the two funds appears nearly identical. Below are the top country exposures as of 12/31/2022.

ACWISPGM
United States60.12%59.65%
Japan5.53%6.10%
United Kingdom3.85%4.35%
Canada3.08%3.29%
China3.61%3.04%
Source: ThoughtfulFinance.com, iShares, State Street

Market Cap Exposure

ACWI tracks the large- and mid-cap MSCI All-Country World Index Index, while SPGM tracks the more expansive Investable Market Index (IMI) version of the index. So SPGM owns many more mid-caps and small-caps. In other words, ACWI is a large-cap vehicle, while SPGM is a total market vehicle. That being said, due to market cap weighting, both funds are overwhelmingly influenced by the large-cap holdings.

ACWISPGM
Large-Cap84%81%
Mid-Cap16%12%
Small-Cap0%6%
Source: ThoughtfulFinance.com, Morningstar (as of 1/31/2023)

Sector Weights

The sector weights between ACWI and SPGM are nearly identical, as of 12/31/2022.

ACWISPGM
Information Technology19.90%19.19%
Financials15.05%14.45%
Health Care13.33%13.24%
Consumer Discretionary10.42%12.17%
Industrials10.10%10.68%
Consumer Staples7.74%7.23%
Communication6.77%6.53%
Energy5.56%5.74%
Materials4.97%4.87%
Utilities3.18%3.08%
Real Estate2.61%2.74%
Source: ThoughtfulFinance.com, iShares, State Street

Transaction Costs

Both ACWI and SPGM are free to trade on many platforms. ACWI is one of the largest ETFs around with bid-ask spreads of .01%, while SPGM has not attracted much assets and sports a .13% bid-ask spread.

Expenses

ACWI sports an .32% expense ratio, while SPGM is a fraction of that at .09%. In other words, ACWI is 3x more expensive or 23 basis points more expensive.

Tax Efficiency & Capital Gain Distributions

As with most equity ETFs, neither ACWI nor SPGM makes capital gains distributions. Therefore, both funds are about as tax-efficient as can be.

Final Thoughts: SPGM vs ACWI

Both ACWI and SPGM are large, core funds sponsored and managed by the largest asset managers in the world. Additionally, their underlying portfolios are nearly identical and the two funds move in sync. ACWI is much larger, liquid, and cheaper to trade, although it is also more expensive. Deciding which fund is better is a tough call in my opinion and I do not think there is a right answer as far as which fund is “better.”

ACWI has a much more liquid options market, so any options-related strategies may call for ACWI rather than SPGM.

ACWX vs IXUS: Comparison (and a clear winner)

The iShares MSCI All-Country World Index ex-US ETF (ACWX) and the iShares Core MSCI All-Country World Index ex-US ETF (IXUS) are two of the largest ETFs in existence and both are sponsored by Blackrock’s iShares. As their names suggest, ACWX and IXUS are a core holding of many portfolios. Many investors compare IXUS vs ACWX in order to decide which should be the foundation of their portfolio.

A quick reminder that this site does NOT provide investment recommendations. Fund comparisons (such as this one) are not conducted to identify the “best” fund (since that will vary from investor to investor based on investor-specific factors). Rather, these fund comparison posts are designed to identify and distinguish between the fund details that matter versus the ones that don’t.

The Short Answer

ACWX and IXUS are nearly identical is most ways, but ACWX is much more expensive than IXUS. In most situations, IXUS is preferable to ACWX.

The Longer Answer

These funds are nearly identical in most ways, although ACWX is a much more expensive fund.

ACWX and IXUS track different indices. The older ACWX tracks the large-cap MSCI All-Country World Index ex-US Index, while IXUS tracks the MSCI All-Country World Index ex-US Investable Market Index (IMI) which owns more mid-caps and small-caps (see our comparison of the indices here).

History of ACWX and IXUS

ACWX was one of the first (if not the first) All-Country World Index ex-US ETF to launch, back in 2008. This first mover advantage gave it an edge in accumulating assets under management (AUM) and became the liquid vehicle of choice for traders. Even as other All-Country World Index ex-US ETFs launched and competitors engaged in cutting fees, ACWX was able to command premium fees. However, Vanguard and other sponsors were able to begin capturing market share with ever decreasing costs. Blackrock (which owns iShares) needed to respond with a lower cost option, but did not want to sacrifice their golden goose ACWX. So rather than cut ACWX’s fees, they launched IXUS at a much lower fee level. Essentially, they created IXUS to compete with Vanguard without giving up the high fees that ACWX was collecting.

Historical Performance: IXUS vs ACWX

Since IXUS’s launch in October 2012, it has outperformed ACWX by .33% annually. This has mostly been driven by the fee differential, which currently stands at .25%. The cumulative performance over the past 10 years is about 5%. As the below chart illustrates, the two funds move in lockstep, but the ACWX’s performance is degraded by its expenses.

Differences between IXUS vs ACWX

These two funds are nearly identical in every way. Beyond the expenses, the biggest difference between ACWX and IXUS is the market cap exposure of the funds.

Geographic Exposure

The country exposures of the two funds appears nearly identical. Below are the top country exposures as of 12/31/2022.

ACWXIXUS
Japan13.95%14.96%
United Kingdom9.69%9.74%
China9.12%8.19%
Canada7.71%7.64%
France7.57%6.80%
Source: ThoughtfulFinance.com, iShares

Market Cap Exposure

ACWX tracks the large- and mid-cap MSCI All-Country World Index ex-US Index, while IXUS tracks the more expansive Investable Market Index (IMI) version of the index. So IXUS owns many more mid-caps and small-caps. In other words, ACWX is a large-cap vehicle, while IXUS is a total market vehicle. That being said, due to market cap weighting, both funds are overwhelmingly influenced by the large-cap holdings.

ACWXIXUS
Large-Cap87%75%
Mid-Cap12%19%
Small-Cap0%4%
Source: ThoughtfulFinance.com, Morningstar (as of 1/31/2023)

Sector Weights

The sector weights between ACWX and IXUS are nearly identical, as of 12/31/2022.

ACWXIXUS
Financials20.99%19.48%
Industrials12.16%13.25%
Consumer Discretionary11.30%11.32%
Information Technology10.69%10.69%
Health Care9.80%9.45%
Consumer Staples8.88%8.78%
Materials8.32%8.51%
Energy6.02%5.73%
Communication5.91%5.59%
Utilities3.30%3.36%
Real Estate2.24%3.31%
Source: ThoughtfulFinance.com, iShares

Transaction Costs

Both ACWX and IXUS are free to trade on many platforms. These are two of the largest and most liquid ETFs, so the bid-ask spreads are extremely low too.

Expenses

ACWX sports an .32% expense ratio, while IXUS is a fraction of that at .07%. In other words, ACWX is 5x more expensive or 25 basis points more expensive.

Tax Efficiency & Capital Gain Distributions

As with most equity ETFs, neither ACWX nor IXUS makes capital gains distributions. Therefore, both funds are about as tax-efficient as can be.

Final Thoughts: IXUS vs ACWX

Both ACWX and IXUS are large, core funds sponsored and managed by one of the largest asset managers in the world. Additionally, their underlying portfolios are nearly identical and the two funds move in sync. However, ACWX is much more expensive, so IXUS is the way to go in most situations.