VTI vs IVV: Side-by-Side ETF Comparison

VTI vs IVV: Both charge 0.03% and posted similar one-year gains (14.07% vs 14.43%), but VTI owns the entire U.S. market while IVV sticks to the S&P 500, so you get roughly 4,000 extra small- and mid-cap stocks with VTI. If you want pure large-cap exposure, pick IVV; if you prefer to capture the whole market in one shot, VTI is your fund.

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

Vanguard's VTI and BlackRock's IVV both charge the same rock-bottom 0.03% fee, but they slice the U.S. market differently. VTI owns the whole haystack - about 4,000 stocks spanning everything from Apple down to micro-caps that barely register on the radar - while IVV sticks to the 500 biggest fish in the S&P 500 pond. That breadth shows up in the sector weights: technology dominates both at 33-34%, yet VTI's inclusion of smaller companies pulls financial services up to 13.3% versus IVV's 12.6%, and drops communication services to make room for more diverse exposure.

The practical difference comes down to whether you want pure large-cap exposure or something closer to the total market. IVV's tighter focus gives you slightly higher dividend income (1.17% versus 1.12%) and has eked out a better one-year return recently - 14.43% versus VTI's 14.07%. But VTI's broader sweep means you won't miss out when smaller companies surge, though you'll also feel their pain harder during downturns. Both trade on NYSE ARCA and use sampling techniques to track their indexes, so the choice really hinges on whether you believe the extra diversification is worth the complexity.

Annual & Cumulative Returns

The numbers tell a clear story: IVV has consistently outperformed VTI across every major time period except year-to-date. The gap isn't dramatic - roughly half a percentage point annually over the past decade - but it's persistent. What's interesting is how this margin has actually widened recently, with IVV pulling ahead by 1.4 percentage points over five years and 0.7 points over three years.

This performance difference makes sense when you consider what each fund owns. IVV tracks the S&P 500's large-cap focus, while VTI casts a wider net across the entire market including smaller companies that have lagged during the recent bull run. The tech sector weightings are nearly identical (33.2% vs 34.3%), so that's not driving the difference. Instead, IVV's exclusion of smaller companies - which have struggled in recent years - has been a tailwind. For investors, this suggests that if you believe large caps will continue leading, IVV's slight edge might persist. But the difference is small enough that either choice works fine for broad market exposure.

Risk Metrics

The numbers tell a clear story about risk versus reward. IVV shows lower volatility across both timeframes, with 3-year volatility of 11.95% compared to VTI's 12.56%. This 0.61 percentage point difference might seem small, but it adds up when compounded over years. The Sharpe ratio gap is more pronounced, IVV's 1.4 significantly outpaces VTI's 1.29, meaning investors got better compensation for each unit of risk they took with the S&P 500 fund.

These metrics reflect what you'd expect from their holdings. VTI's inclusion of smaller companies adds volatility, those firms typically swing harder in both directions. Yet the total market approach only delivered slightly higher 1-year returns (14.07% vs 14.43%), not enough to justify the extra risk for many investors. Conservative types who prioritize smoother rides will likely prefer IVV, while those willing to accept more bumps for potentially better long-term growth might still favor VTI's broader diversification.

Dividend Yield & Growth

The dividend difference between these two funds is modest but real. IVV's 1.17% yield edges out VTI's 1.12%, which makes sense when you consider the underlying holdings. The S&P 500 companies that IVV tracks tend to be larger, more established firms with steadier dividend policies. VTI's inclusion of smaller companies - those mid, small, and micro-cap names - naturally drags down the overall yield since many of these firms reinvest profits rather than pay dividends.

Both funds distribute payments quarterly, so there's no timing advantage either way. For investors living off portfolio income, that extra 0.05% from IVV translates to about $50 more per year on a $100,000 investment. Not life-changing money, but worth noting if you're building a dividend-focused strategy. The flip side is that VTI's broader market exposure includes more growth-oriented companies that could potentially deliver higher total returns through price appreciation rather than dividend payments.

Fees & Liquidity

Both ETFs charge the same rock-bottom 0.03% annual fee, which means you’ll pay just 30 cents each year for every $1,000 invested. That parity removes cost from the decision tree; whether you buy the whole U.S. market through VTI or stick with the S&P 500 via IVV, the fee drag on your returns is essentially zero.

Trading costs are where the two can diverge. IVV, tracking the mega-liquid S&P 500, regularly posts penny-wide spreads and tens of millions of shares changing hands daily, so most investors can get in and out at market price without noticing slippage. VTI trades well too, but because it includes thousands of smaller names, average volume and bid-ask size are a notch lower; if you’re moving large blocks during the first or last 15 minutes of the session, you might pick up an extra basis point or two in spread. Unless you’re a frequent trader, the difference is more academic than material.

ETF Composition: Asset Classes

VTI holds 98.8% in U.S. stocks while IVV pushes that figure to 99.2%, a difference that looks tiny on paper yet reflects the funds’ scopes: IVV tracks only the S&P 500, so it stays almost fully invested in those 500 large-caps, whereas VTI’s mandate to own “the whole market” leaves a hair more room for the thin sliver of cash and micro-caps that don’t fit neatly into the index. Both keep overseas exposure under 0.6%, so currency risk is effectively the same essentially zero.

What matters is how that 0.4% gap in pure domestic equity exposure plays out in practice. For IVV, the missing slice is mostly the 4-5% of the market that lives in small- and micro-cap land; VTI grabs that slice, which can soften drawdowns when large-caps wobble but can also drag when megacaps sprint ahead. If you want the cleanest, lowest-maintenance large-cap play, IVV’s 99.2% purity does the job. If you’d rather own the entire U.S. market in one shot even the names too small to make headlines VTI’s 98.8% equity stake delivers that completeness without adding any meaningful complexity.

Regional Allocation

Both VTI and IVV are essentially all-in on the United States; each parks just shy of 99.5% of its assets in North-American listings. The residual slivers are a mix of foreign firms that happen to trade on U.S. exchanges as ADRs or depositary receipts, so the numbers don’t signal any deliberate global diversification. What separates them is how that leftover half-percent is scattered: IVV holds a touch more developed-Europe exposure (0.38% versus 0.25%) while VTI keeps a microscopic toe-hold in Asia-developed (0.04%) and Latin America (0.06%) that IVV simply doesn’t have.

For practical purposes, the gap is immaterial; either fund gives you a dollar-denominated, U.S.-centric portfolio with currency risk that is almost identical to the S&P 500. If you’re building a simple core and plan to add separate international ETFs anyway, the regional difference here won’t sway the decision. Choose between them on cost, size range, or sector weight, not on geography, because both maps read the same: almost entirely USA.

Sector Weights

The sector breakdowns look nearly identical at first glance, but the small gaps add up. Technology dominates both portfolios, yet IVV's 34.3% weight edges past VTI's 33.2%. That one-percentage-point spread might seem trivial until you remember tech stocks drove most market gains lately, so the S&P 500 fund gives you a touch more exposure to the sector that matters most. Communication services shows a clearer difference - IVV carries 10.9% versus VTI's 10.1% - while healthcare tilts the other way at 9.6% in IVV and 10.3% in VTI.

These tiny shifts reflect the underlying indexes. VTI owns the entire market, so it holds mid- and small-cap healthcare names that don't make the S&P 500 cut. IVV sticks to large caps, which explains why real estate drops to 1.8% compared with VTI's 2.3%. Energy and utilities sit within 0.2 percentage points of each other, showing that size doesn't matter much in those capital-intensive industries. For most investors, the sector differences won't move the needle - both funds deliver heavy tech exposure with similar defensive stakes - but if you want the slightest large-cap tilt, IVV gets you there.

Top 10 Holdings

The top five positions look nearly identical at first glance, but IVV’s mega-cap focus tilts the weights noticeably higher: NVIDIA occupies 7.6% of the S&P 500 fund versus 6.6% in VTI, and the same pattern holds for Microsoft, Amazon, and Alphabet. Put together, just these five names eat up 26% of IVV’s assets, while they account for 22% of VTI. That 4-percentage-point gap shows up across the whole portfolio IVV’s median market cap is larger, so the index leans harder on the market’s biggest winners (or losers) on any given day.

For investors, the takeaway is less about which fund owns “better” stocks and more about how much single-company sway you’re comfortable carrying. A 7.6% NVIDIA stake means IVV’s one-year track will feel every 10% swing in that chipmaker’s price about 15% more than VTI will. If you like the idea of letting today’s market darlings drive returns, IVV’s concentration can help; if you’d rather dilute that influence with the thousands of smaller names VTI folds in, the total-market route smooths the ride without costing an extra basis point in fees.

Valuation & Growth Metrics

VTI trades at a modest discount to IVV across every valuation metric: 21.5× earnings versus 22.3×, 4.1× book compared with 4.5×, and 2.9× sales next to 3.2×. Those gaps aren’t dramatic, but they add up especially when both funds already sit well above long-term market averages. The difference comes mainly from VTI’s 15-odd percent stake in mid- and small-cap names, which typically command lower multiples than the megacaps that dominate the S&P 500.

Growth stories flip depending on the time frame you trust. Looking ahead, Wall Street expects the two portfolios to expand earnings at almost the same pace roughly 10.5 % a year so the cheaper valuation isn’t obviously paid for with slower profits. History is messier: IVV’s large caps grew earnings about 1.6 percentage points faster (10.3 % vs 8.7 %) over the trailing stretch, and sales actually rose 8 % while VTI’s broader basket shrank 39 %, dragged down by smaller companies still grappling with margin pressure. If you think the market’s next leg is led by steady megacap cash flows, IVV’s premium looks tolerable; if you’d rather bank on mean-reversion and a lower starting price, VTI offers a slightly better margin of safety.

Which ETF Fits Your Portfolio?

VTI and IVV cost the same 0.03% a year and their recent performance is almost identical, yet they give you two different slices of the U.S. market. IVV sticks to the 500 largest companies and leans slightly more toward tech and communication services, which helped it edge out VTI by 0.36 percentage points over the past year. VTI spreads your money across roughly 4,000 stocks, so you pick up an extra 13% in mid-, small- and micro-caps that the S&P 500 simply ignores.

If you already hold separate small-cap or extended-market funds, IVV is the cleaner large-cap building block. Want one fund that covers everything without overlap, or you’d like a bit more exposure to smaller companies that sometimes lead early in a cycle, VTI does the job in a single trade. Either way you’re getting a cheap, broad U.S. basket; the choice comes down to how much of the market you want on your first purchase.

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.