SPY vs VTI: Side-by-Side ETF Comparison

SPY vs VTI comes down to scope versus cost: SPY tracks just the S&P 500 at 0.10% while VTI owns the entire U.S. market - including small-caps - for barely one-third the fee at 0.03%. The trade-off? SPY's large-cap focus delivered a 0.29% higher return this year, though VTI's broader diversification and lower expenses make it the default choice for most long-term investors.

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

SPY comes from State Street Global Advisors, the firm that essentially invented the ETF back in 1993. It tracks the S&P 500, which means you're buying the 500 largest U.S. companies weighted by market value. Nothing fancy - Apple at 7%, Microsoft at 6%, and so on down the line. The fund holds every stock in the exact proportion it appears in the index, making it a pure play on large-cap American business.

VTI is Vanguard's take on U.S. stocks, but with a crucial difference: instead of 500 companies, you get about 4,000. The fund owns everything from Apple down to micro-caps you've never heard of, representing virtually the entire investable U.S. market. While it still leans heavily on large caps (the top 10 holdings mirror SPY's), the 18% allocation to mid- and small-caps gives you broader exposure. Both funds charge rock-bottom fees, though Vanguard's 0.03% undercuts SPY's 0.10% by two-thirds.

Annual & Cumulative Returns

The numbers tell a consistent story: SPY edges out VTI across longer timeframes, but the margin is surprisingly thin. Over the past decade, SPY's 15.63% annual return beat VTI by just 0.34 percentage points annually - hardly the kind of gap that keeps investors up at night. The five-year picture shows a slightly wider 1.33% spread, yet both funds essentially moved in lockstep during shorter periods like the recent 1-year window where SPY's 14.36% barely nudged past VTI's 14.07%.

What stands out isn't the performance gap but how often these funds trade places. VTI actually pulled ahead year-to-date with 1.58% versus SPY's 1.07%, and the three-year numbers favor SPY by only 0.60%. For investors choosing between them, this suggests the decision hinges more on whether you want pure large-cap exposure (SPY) or the broader market sweep that includes smaller companies (VTI). The return differential simply isn't dramatic enough to be the deciding factor.

Risk Metrics

SPY shows slightly lower volatility across both timeframes, with its 1-year standard deviation of 10.98% beating VTI's 11.38%. The gap widens over three years, where SPY's 11.94% volatility sits 0.62 percentage points below VTI's 12.56%. This difference stems from VTI's inclusion of smaller companies, which tend to swing more dramatically than the large-cap stocks dominating SPY's S&P 500 holdings.

The Sharpe ratio tells a similar story. SPY's 1.39 reading over three years means investors earned better risk-adjusted returns compared with VTI's 1.29. While both funds delivered similar raw performance (SPY returned 14.36% versus VTI's 14.07% in the past year), SPY achieved those returns with less turbulence. For investors who lose sleep over portfolio swings, that modest volatility edge might justify SPY's slightly higher 0.10% expense ratio versus VTI's 0.03% fee.

Dividend Yield & Growth

The dividend difference between these two funds is almost invisible. VTI edges out SPY by 0.05 percentage points - that's five cents more per $100 invested. Both pay quarterly, so your cash flow timing is identical. What matters more is what's driving those yields. VTI's slightly higher payout comes from its 4,000+ holdings versus SPY's 500. Those extra small- and mid-cap stocks in VTI tend to pay higher dividends than the mega-caps dominating SPY.

This tiny yield gap won't move the needle for income-focused investors. Neither fund is designed for dividend growth either - they're market-cap weighted, so they hold whatever the index holds. If you're choosing between them based on dividends alone, you're missing the bigger picture. The real difference lies in diversification: VTI gives you the entire US market while SPY sticks to large companies. Pick the one that matches your desired market exposure, not the one with the marginally better yield.

Fees & Liquidity

VTI's 0.03% expense ratio saves you real money over SPY's 0.095%. On a $10,000 position, that's $9.50 annually for SPY versus $3 for VTI - a difference of $6.50 each year that compounds over time. Neither fee will break the bank, but VTI's cost advantage is meaningful for buy-and-hold investors building wealth over decades.

Both ETFs trade millions of shares daily, so you'll get tight bid-ask spreads whether you choose SPY or VTI. The liquidity difference shows up in options markets where SPY dominates with deeper volume and narrower spreads. For occasional traders this won't matter much, but active options traders might find SPY's superior liquidity worth the extra 0.065% in annual fees.

ETF Composition: Asset Classes

Both ETFs are essentially all-in on U.S. equities - SPY parks 99.1% of its assets in American stocks while VTI is right behind at 98.8%. The tiny residual slivers (about half a percent in foreign listings and 0.3-0.4% cash) are just friction from index rebalancing and dividend accruals, not a deliberate allocation decision. In practical terms, either fund gives you a portfolio that rises and falls with the domestic market; currency risk or overseas economic shocks barely register.

What sets them apart is what those “U.S. stocks” labels actually contain. SPY’s 99% is strictly the S&P 500, so every dollar buys large-caps. VTI’s 98.8% stretches from mega-caps down to micro-caps, meaning a small but measurable chunk of your money sits on companies too small or too new to qualify for the S&P 500. That difference is only 3-4% of assets today, yet it’s the reason VTI’s P/E is a touch lower (21.5 vs 22.3) and why it will behave a shade differently when small-caps rally or retreat.

Regional Allocation

Both funds are essentially all-in on American companies, with 99.5% of their assets parked in North America. The residual sliver - barely half a percent - is the trace left when an S&P 500 or total-market member happens to be domiciled abroad yet trades primarily in New York. SPY keeps that foreign residue to 0.53%, while VTI stretches it to 0.51%, the difference coming from Vanguard’s wider sweep that picks up a few micro-caps with foreign parents.

What this means for a portfolio is simple: either choice gives you the U.S. economy and nothing else. Currency swings, European earnings recessions, or Asian policy shifts won’t move these funds; only what happens inside the 50 states will. If you already own an international ETF, the two tickers slot in cleanly without overlap. If you don’t, you’ll need a separate holding to balance the home-country bias these numbers make crystal clear.

Sector Weights

The sector breakdowns reveal how little daylight sits between these two funds. SPY devotes 34.2% to technology, only one percentage point more than VTI’s 33.2% a gap that barely moves the needle in most market environments. Financial services land within half a point of each other as well, and every other sector difference is measured in tenths. Real estate is the one mild exception: VTI’s 2.3% allocation is about half a point higher, thanks to the small-cap REITs that the S&P 500 often excludes.

What this means is that the “total market” label on VTI doesn’t deliver the diversification bump many investors expect. Both funds are still dominated by the same mega-cap names, so if Apple or Microsoft sneezes, either ETF catches a cold. The micro- and small-cap exposure in VTI does tilt the portfolio toward industrials (8.8% vs 8.0%) and away from communication services (10.1% vs 10.8%), but the shifts are too small to act as a meaningful buffer during tech-led sell-offs. Choose either one and you’re essentially betting on the same sector horses; the only real question is whether you want a sliver more of the market’s tail.

Top 10 Holdings

Both ETFs lean heavily on the same five mega-caps, but SPY gives them more room to dominate. NVIDIA occupies 7.6% of SPY’s assets versus 6.6% in VTI, and the gap is similar for Amazon and Alphabet. Add the five together and they account for roughly 26.5% of SPY; in VTI the same names barely top 24%. That half-percentage-point tilt might sound trivial, yet it means SPY investors are taking about 8% more concentrated exposure to big-tech swings than VTI holders.

The overlap isn’t accidental large-caps drive both indexes but VTI’s inclusion of mid- and small-caps naturally waters down the giants. The result is a portfolio whose top five still matter, just slightly less. If tech rallies, SPY will likely edge ahead; if the market broadens out, VTI’s deeper bench should keep pace or pull ahead. Picking between them comes down to whether you want the purest play on America’s biggest names or a wider net that still keeps the same headline stocks at the helm.

Valuation & Growth Metrics

VTI trades at a modest discount to SPY across every valuation metric - its P/E of 21.5 sits 0.8 points below SPY's 22.3, while the gap widens to half a point on price-to-book (4.1 vs 4.5). The difference stems from VTI's inclusion of smaller companies: mid and small-caps typically carry lower multiples than the mega-caps that dominate SPY. This valuation cushion shows up in sales growth, where VTI's -39% figure reflects how smaller firms got hammered by rising costs and tighter financing, while SPY's large-caps managed 8% revenue expansion.

The growth picture gets more interesting when you look past recent sales numbers. Both ETFs project nearly identical long-term earnings growth around 10.5%, but SPY's historical earnings growth of 10.3% trounces VTI's 8.7%. That gap suggests the S&P 500's quality filter - requiring consistent profitability for inclusion - actually matters for bottom-line results. For investors, this means VTI offers a slightly cheaper entry point with broader diversification, but you're paying for companies that historically convert revenue to earnings less efficiently than SPY's curated large-cap collection.

Which ETF Fits Your Portfolio?

SPY and VTI are essentially the same story told at different scales. Both delivered almost identical 14% returns over the past year, both lean heavily on the same tech giants, and both charge pocket-change fees. The real fork in the road is breadth: SPY owns only the 500 largest U.S. companies, while VTI scoops up the entire market about 4,000 stocks that include midsize and small caps. That extra slice gives VTI a hair more dividend income (1.12% versus 1.07%) and a slightly lower valuation multiple (21.5 vs 22.3), but the day-to-day performance difference is usually measured in hundredths of a percent.

Choose SPY if you want the most liquid ETF on the planet tight spreads, options galore, and a name every trader recognizes. Pick VTI if you’d rather pay one-third the expenses (0.03% vs 0.10%) and capture whatever the small-cap universe might add over the next decade. Either way you’ll get the market’s dominant large-cap stocks; the only question is whether you want the pure headline index or the whole haystack with it.

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

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