IVV vs VTI: Comparison by an expert

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

The Short Answer

The biggest difference is that IVV hold mostly large-cap stocks, while VTI is a “total market fund” and 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 IVV

IVV was launched in May 2000, while IVV was launched a year later in May 2001. Since then, VTI has outperformed by .35% annually. 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 two decades is about 32%.

Differences between VTI vs IVV

The biggest difference between IVV and VTI is the market cap exposure of the funds. IVV 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 IVV and VTI hold essentially 100% US 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

IVV tracks the S&P 500 index and so it mostly holds large-caps with a bit of mid-cap exposure. VTI tracks the broader CRSP US Total Market Index and so it owns many more mid-caps and small-caps. In other words, IVV 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.

Source: ThoughtfulFinance.com, Morningstar; data as of 12/31/2022

Sector Weights

The sector weights between IVV and VTI are nearly identical.

Basic Materials2.50%2.65%
Consumer Cyclical9.63%9.77%
Financial Services14.20%13.93%
Real Estate2.82%3.51%
Communication Services7.44%6.71%
Consumer Defensive7.65%6.98%
Source: ThoughtfulFinance.com, Morningstar; data as of 12/31/2022


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 IVV 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 IVV 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). VTI has never made a capital gains distribution and IVV has not made a capital gains distribution in 20+ years (and I do not expect it to moving forward). 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 IVV

Both IVV and VTI are large, core funds sponsored and managed by two of the largest investment sponsors in the world. Although IVV 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.

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