IVV vs VTI: Side-by-Side ETF Comparison

IVV vs VTI both cost 0.03% and delivered similar 14% returns this year, but IVV holds just 500 large caps while VTI owns the entire U.S. market including small and mid-cap stocks. The choice comes down to whether you want pure large-cap exposure (IVV) or complete market coverage (VTI).

Table of Content

• Annual & Cumulative Returns
• Risk Metrics
• Dividend Yield & Growth
• Fees & Liquidity
• ETF Composition: Asset Classes
• Regional Allocation
• Sector Weights
• Top 10 Holdings
• Valuation & Growth Metrics
• Which ETF Fits Your Portfolio?

ETF Issuers & Investment Objective

IVV comes from iShares, the ETF arm of BlackRock, and tracks the S&P 500 - nothing more, nothing less. The fund holds 500 of America's biggest companies, with technology making up over a third of the portfolio at 34.3%. It's a straightforward bet on large-cap American businesses, plain and simple.

VTI, issued by Vanguard, casts a much wider net. Where IVV stops at 500 stocks, VTI owns nearly every publicly traded U.S. company - from mega-caps down to micro-caps. This means you're getting exposure to about 4,000 stocks total, including the small and mid-cap names that IVV completely ignores. The trade-off? You still end up with similar sector weightings since the largest companies dominate both funds, but VTI gives you that extra diversification across the entire market. Both charge the same rock-bottom 0.03% expense ratio, so your choice really comes down to whether you want pure large-cap exposure or the full U.S. market sweep.

Annual & Cumulative Returns

IVV's focus on large-caps has delivered a modest edge over VTI across every trailing period except the most recent year. The S&P 500 fund compounded at 15.69% annually over the past decade, beating the total-market ETF by 0.4 percentage points, and the gap widens to 1.4 points over five years. That pattern suggests mega-caps have carried the market for much of the cycle, so a portfolio that tilts slightly toward them (IVV holds no mid- or small-caps) captured more of the rally.

Still, the difference is small enough that a reversion can appear quickly: VTI is ahead by roughly half a point in 2024 and trails by only 0.36 point over the past twelve months. Both funds charge the same 0.03% fee and post similar sector weights, so the choice comes down to whether you want pure large-cap exposure or the extra diversification that comes from holding the entire U.S. market. Investors who expect small-caps to close the gap may lean toward VTI; those comfortable betting on the biggest names can stick with IVV and accept the slightly higher P/E (22.3 vs 21.5) that accompanies it.

Risk Metrics

IVV shows slightly steadier sailing with 10.99% volatility over the past year versus VTI's 11.38%, and the gap widens when you stretch the window to three years - 11.95% for the S&P 500 tracker compared with 12.56% for the total-market fund. That extra calm translates into a better risk-adjusted return: IVV's Sharpe ratio of 1.4 over the period beats VTI's 1.29, meaning investors picked up more return for each unit of volatility they swallowed.

The difference makes sense. By skipping smaller companies, IVV sidesteps the sharper price swings that come with junior-sized firms. VTI's broader net captures that extra bumpiness, but the reward is only marginal - its one-year return trails IVV by 0.36 percentage points - so the trade-off tilts slightly in favor of the large-cap-only portfolio for volatility-sensitive holders.

Dividend Yield & Growth

The dividend difference between these two ETFs is almost negligible - IVV pays 1.17% while VTI yields 1.12%. Both distribute payments quarterly, so there's no timing advantage to either fund. What matters more is what's driving those yields. IVV's slight edge comes from its focus on large-cap dividend payers like Apple and Microsoft, which make up over a third of the fund. VTI's broader reach into mid and small-caps naturally includes younger companies that reinvest profits rather than pay dividends, pulling its average yield down slightly.

Neither yield is particularly exciting for income-focused investors - you're looking at barely over 1% annually. The real story here is total return, where both funds delivered 14%+ over the past year. If you're choosing between them based on dividends alone, the 0.05% difference won't move the needle. Pick IVV if you want pure large-cap exposure with that tiny yield bump, or VTI for complete market coverage with slightly lower dividend income.

Fees & Liquidity

Both ETFs charge the same rock-bottom 0.03% annual fee, so on a $10,000 position you're looking at just three dollars a year in expenses - basically a rounding error. That's why the real cost difference shows up in the bid/ask spread when you trade. IVV usually trades with a one-cent spread, while VTI can be even tighter, but both are liquid enough that a market order for a few hundred shares will get filled at or within a penny of the quoted price.

The practical takeaway: unless you're moving millions of dollars at a time, trading costs are negligible for either fund. Pick the one that matches your market view - large-caps only with IVV or the whole U.S. market including mid- and small-caps with VTI - and don't sweat the fee side.

ETF Composition: Asset Classes

Both funds are almost pure U.S. equity plays, but the way they get there is what sets them apart. IVV’s portfolio is 99.2% domestic stocks, with the remaining half-percent split between tiny cash and even tinier foreign listings that ride along in S&P 500 companies. VTI’s 98.8% U.S. weight looks similar at first glance, yet that extra sliver is spread across the entire market-cap spectrum, not just the giants. The result is a fund that still behaves like a large-blend holding its median market cap stays huge but it owns a measurable dose of mid- and small-caps that never make the S&P 500 cut.

Cash drags are essentially a rounding error for both: IVV parks 0.27% in cash, VTI 0.41%. You won’t feel that difference in daily moves, yet it does hint at Vanguard’s slightly higher turnover as it samples the broader universe. What investors should care about is the source of returns: IVV’s mega-cap focus means performance lives or dies on the FAANGs and big banks, while VTI’s micro-allocation to smaller names can add a touch of diversification if large caps stall. Choose IVV if you want the cleanest play on the headline index; pick VTI if you’d like the same market feel with a built-in safety net of 4,000 extra names.

Regional Allocation

Both ETFs are essentially all-in on North America, with IVV at 99.47% and VTI at 99.49%. The difference amounts to a rounding error - you're getting pure U.S. exposure either way. What little foreign allocation exists is scattered across developed markets, with IVV holding 0.38% in Europe versus VTI's 0.25%.

The real story here is what's missing rather than what's present. Neither fund offers meaningful geographic diversification - you're betting entirely on the U.S. economy. VTI includes a sliver more emerging markets exposure at 0.12% versus IVV's 0.11%, but again, these numbers are practically meaningless. If you're looking for international diversification, you'll need to pair either fund with a separate international ETF. The choice between them should come down to market cap exposure (large-cap only versus total market) rather than regional allocation, since both deliver essentially identical geographic profiles.

Sector Weights

The sector weightings between these two funds are remarkably similar, which makes sense given that both track the same market. IVV's 34.3% technology allocation sits just one percentage point above VTI's 33.2%, while the difference in financial services is even smaller at 0.7%. Where you'll notice meaningful divergence is in the smaller sectors - VTI allocates 10.3% to healthcare versus IVV's 9.6%, and includes slightly more exposure to industrials at 8.8% compared to 7.9%.

These modest differences reflect VTI's broader market approach. The inclusion of smaller companies gives it marginally higher weights in sectors like healthcare and industrials, while IVV's large-cap focus slightly tilts it toward communication services and technology giants. For most investors, these variations won't meaningfully impact performance - the sector splits are close enough that both funds will rise and fall with similar market forces. The choice really comes down to whether you want pure large-cap exposure or the added diversification that comes from including smaller companies.

Top 10 Holdings

The top five positions in both ETFs are nearly identical, but IVV's S&P 500 focus shows up in higher concentration weights. NVIDIA dominates both portfolios at 7.59% in IVV versus 6.56% in VTI - that extra percentage point might seem small, but it reflects how the S&P 500's market-cap weighting amplifies mega-cap influence compared to VTI's broader market approach. Apple and Microsoft follow similar patterns, each claiming slightly larger slices of IVV's portfolio.

These differences might appear minor at the holding level, yet they compound across the entire portfolio. VTI's 0.75% lower allocation to its top five stocks means more capital is spread across mid and small-cap companies that never make the S&P 500 cut. For investors, this translates to IVV having marginally higher concentration risk in its biggest positions while VTI offers a touch more diversification beyond the mega-caps that dominate both funds.

Valuation & Growth Metrics

IVV trades at a premium across every valuation metric - its 22.3 P/E and 4.5 price-to-book ratio sit roughly 4% and 12% above VTI's respective multiples. The gap widens further on price-to-sales, where IVV's 3.2 multiple exceeds VTI's 2.9 by about 10%. These higher ratios make sense given IVV's concentrated exposure to mega-cap tech names that command premium valuations, while VTI's inclusion of mid and small-caps naturally drags its overall multiples lower.

The growth picture flips depending on your timeframe. Looking ahead, both funds show similar long-term earnings growth expectations around 10.5%, but historical results favor IVV's large-cap focus - its 10.3% trailing earnings growth and 8% sales growth dwarf VTI's 8.7% and negative 39% respectively. That dramatic sales decline in VTI reflects the drag from smaller companies that got hammered during the recent economic cycle, whereas the S&P 500's blue-chip constituents held up better. Investors essentially pay slightly higher valuations for IVV in exchange for what has been more resilient growth, though both funds are pricing in nearly identical forward earnings expansion.

Which ETF Fits Your Portfolio?

The choice between IVV and VTI comes down to scope. IVV gives you the 500 largest U.S. companies with a slight tech tilt (34.3% versus 33.2% in VTI) and a marginally higher yield at 1.17%. Its 14.43% one-year return beat VTI's 14.07%, but that outperformance is tied to large-caps simply having a better run lately.

VTI spreads your money across the entire market - roughly 4,000 stocks including the small and mid-cap names that IVV skips. This means when smaller companies rally, VTI should capture more of it. Both charge the same rock-bottom 0.03% fee, so cost isn't a deciding factor. If you want pure large-cap exposure with minimal complexity, IVV does the job. If you prefer owning the whole market in one shot and don't mind tracking slightly different returns, VTI makes more sense.

If you want to have look at other ETF comparisons, check out this: Fund Overlap Tool

Data sources: The data has been obtained from the ETF provider's website and ETF fact sheet.