VTI vs SPY: Side-by-Side ETF Comparison

VTI vs SPY comes down to breadth vs blue-chips: VTI's 0.03% fee and 14.07% one-year return reflect its 4,000+ stock portfolio spanning the entire U.S. market, while SPY's 0.10% fee and 14.36% return track just the S&P 500's 500 large caps. The extra 70 basis points of annual costs buys you micro- through mid-cap exposure with VTI, though both ETFs currently allocate roughly one-third to tech and sport similar P/E ratios around 21-22x.

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?
• FAQ

ETF Issuers & Investment Objective

VTI comes from Vanguard, the company that built its reputation on low-cost index investing. This fund casts the widest possible net across American stocks - everything from Apple down to companies you've never heard of. At 0.03% annually, you're paying essentially nothing for that breadth. The fund holds about 4,000 stocks total, which means when smaller companies start gaining ground, you're already there.

SPY arrived first, launched by State Street in 1993 as the original ETF. It tracks only the S&P 500, so you're getting the biggest American companies without the smaller stuff. The 0.10% expense ratio costs more than VTI but remains reasonable. SPY's narrower focus means it's more concentrated in mega-caps - tech alone makes up 34% of the portfolio, and the top 10 holdings drive most of the performance. Both funds trade on NYSE ARCA and use similar sampling techniques, but VTI's broader reach captures the full spectrum of American business while SPY sticks to the established giants.

Annual & Cumulative Returns

SPY has edged out VTI by about 0.3 to 1.3 percentage points annually over every period except the most recent year. The gap widens as the timeline stretches - five years of compounding turns that 1.3-point difference into roughly a 7 percent larger portfolio for the S&P 500 investor. VTI's slight 2024 edge (1.58% versus 1.07% YTD) shows small-caps haven't dragged as much as they did in prior cycles, but it's too early to call a regime change.

The takeaway is more about similarity than superiority. Both funds move in near-lockstep because large-caps drive roughly 85% of VTI's weight; the extra 4,000 smaller companies barely budge the final number. Investors choosing VTI aren't sacrificing much return - they're trading a sliver of performance for broader diversification and a 7-basis-point fee advantage that quietly compounds over decades.

Risk Metrics

VTI's broader market exposure shows up in its slightly higher volatility, with 3-year standard deviation of 12.56% compared to SPY's 11.94%. The difference isn't dramatic - about 0.6 percentage points annually - but it's consistent. VTI's inclusion of small and mid-cap stocks, which tend to swing more than large caps, explains this pattern. The 1-year numbers tell a similar story, with VTI at 11.38% versus SPY's 10.98%.

The Sharpe ratio gap is more meaningful. SPY's 1.39 reading over three years means investors earned better risk-adjusted returns than VTI's 1.29. Both are solid scores, but SPY's edge suggests the S&P 500's large-cap focus provided slightly more return per unit of risk during this period. For investors choosing between them, the question becomes whether VTI's broader diversification is worth accepting marginally higher volatility and lower risk-adjusted returns.

Dividend Yield & Growth

VTI edges out SPY by five basis points on yield, paying 1.12% versus 1.07%. That gap won't change your retirement date, yet it does mean an extra $5 a year for every $10,000 invested. Both funds mail checks every quarter, so the cash-flow calendar looks identical no matter which ticker sits in your account.

The slightly higher yield from VTI comes from its 4,000-plus holdings that dip into mid-, small- and micro-cap names. These companies often pay a bit more than the megacaps that dominate the S&P 500, nudging the fund's income a touch higher. If every dollar of yield matters, VTI gives you it; if you'd rather track the most liquid slice of the market and give up 0.05%, SPY still covers the core.

Fees & Liquidity

VTI's 0.03% expense ratio means you pay just 30 cents annually per $1,000 invested - roughly the cost of a postage stamp. SPY charges more than three times that amount at 0.095%, which works out to 95 cents per $1,000. The gap seems tiny in dollar terms, yet over decades it compounds meaningfully. On a $100,000 portfolio held for 30 years, you'd save about $2,100 with VTI assuming identical pre-fee returns.

Trading costs flip the script. SPY's massive daily volume (often 60-80 million shares) typically translates to bid-ask spreads of one penny or less. VTI trades thinner - spreads frequently run 2-3 cents and can widen during volatile periods. For buy-and-hold investors making occasional purchases, VTI's lower expense ratio wins. Active traders or those dollar-cost averaging small amounts might find SPY's superior liquidity actually costs less once trading frictions enter the picture.

ETF Composition: Asset Classes

Both funds are almost entirely US stocks - 98.8% for VTI and 99.1% for SPY - so the difference here is splitting hairs. What matters is how they get there. VTI achieves this through a broader sampling that includes micro and small-caps, which explains why it holds slightly more non-US exposure (0.6%) and keeps a bit more cash on hand (0.4%). SPY's tighter focus on the S&P 500 naturally skews toward larger companies, so it needs less foreign stock allocation to hit that 99% US target.

The real story isn't in these percentages - it's that both funds deliver the same core exposure for investors wanting US equity. The 0.3% gap in US stock allocation won't move the needle on performance. What will matter is whether you want VTI's inclusion of smaller companies or SPY's pure large-cap focus. Either way, you're getting essentially a 99% US stock portfolio with minimal cash drag.

Regional Allocation

Both funds are essentially all-in on American companies, with VTI at 99.49% North America and SPY a hair behind at 99.47%. That 0.02-percentage-point gap is meaningless in practice; what matters is that either choice gives you almost zero direct foreign revenue exposure. Any international diversification you get will come from the multinationals inside the portfolios, not from the domicile of the stocks themselves.

The tiny slivers outside the U.S. are mostly large-caps with overseas listings: roughly 0.38% Europe-developed names in SPY versus 0.25% in VTI, plus a dash of U.K. and emerging Asia that rounds to about one twentieth of one percent. Unless you’re running a precise country model, these traces won’t move the risk needle. Pick the fund based on market-cap breadth (VTI adds small-caps) or cost, not on geography.

Sector Weights

The sector breakdowns reveal how VTI's broader market exposure creates subtle but meaningful differences from SPY's large-cap focus. While both funds lean heavily on technology - VTI at 33.2% and SPY at 34.2% - the real story emerges in the smaller slices. VTI allocates 8.8% to industrials and 2.9% to energy, compared to SPY's 8.0% and 3.0% respectively, reflecting the inclusion of mid and small-cap companies that often dominate these sectors.

These seemingly minor variations add up to distinct risk profiles. VTI's 13.3% weighting in financial services and 10.5% in consumer cyclicals provides more exposure to regional banks and smaller retailers that don't make the S&P 500 cut. Meanwhile, SPY's slight overweight in communication services (10.8% versus VTI's 10.1%) tilts toward the mega-cap media giants that define the large-cap universe. For investors, this means VTI offers a touch more economic sensitivity through its smaller company exposure, while SPY maintains a purer play on America's corporate giants.

Top 10 Holdings

The top five holdings reveal a familiar pattern: both funds lean heavily on the same mega-cap tech names, just in slightly different proportions. SPY gives NVIDIA a 7.59% weight versus 6.56% in VTI, and the gap persists down the list - Amazon carries 3.85% in SPY but only 3.38% in its rival. These percentage points matter because the five stocks already eat up a quarter of each portfolio, so even modest differences ripple through performance when tech rallies or sells off.

What the table doesn't show is the other 4,000-plus stocks behind these giants. VTI's smaller NVIDIA stake reflects its broader reach - it owns the entire market, not just the S&P 500, so each large-cap name gets diluted by thousands of mid-, small-, and micro-cap positions. That explains why the same companies sit lower in VTI's weights even though both funds track the same dominant sector. For investors, the choice boils down to whether you want pure large-cap concentration (SPY) or the same mega-caps cushioned by the rest of the market (VTI).

Valuation & Growth Metrics

VTI trades at a modest discount to SPY across every valuation yardstick: 21.5 vs 22.3 times earnings, 4.1 vs 4.5 times book, and 2.9 vs 3.1 times sales. That 3-4 percentage-point gap isn’t huge, but it’s persistent and stems from VTI’s 15-20% weight in mid- and small-cap names, which the market still prices a little cheaper than the mega-caps that dominate the S&P 500. The spread also shows up on the growth side: VTI’s long-term earnings growth forecast is a tick higher at 10.6% vs 10.5%, yet its historical earnings growth trails at 8.7% vs SPY’s 10.3%. The eye-catching outlier is top-line growth VTI’s sales figure is negative 39% while SPY clocks a respectable 8%. That plunge is driven by the smaller constituents in VTI’s universe; many kept revenue during 2022-23 but are still digesting pandemic-era bloat, so aggregate sales look worse than the large-cap trend.

What this means for a portfolio decision is mostly a question of how much cheap-beta exposure you want. If you buy VTI you’re accepting a modest valuation cushion and wider market breadth in exchange for a chunk of companies that are still working off sluggish sales. SPY, meanwhile, offers a pricier but more cohesive basket where revenue growth has stayed positive and historical earnings delivery has been stronger. Neither profile is inherently better; they just tilt toward different parts of the U.S. market, and the numbers say the discount in VTI is real but not dramatic.

Which ETF Fits Your Portfolio?

The numbers tell a clear story here. VTI's 0.03% expense ratio saves you $7 per year on every $10,000 invested compared to SPY's 0.10%. That gap adds up over time, especially when you consider VTI holds over 4,000 stocks versus SPY's 500. You're getting broader diversification for less money, which explains why many investors see VTI as the default choice.

But SPY isn't obsolete by any means. It beat VTI by 0.29% this past year and offers unmatched liquidity for traders. The S&P 500 focus means you miss out on smaller companies, but you also avoid the volatility that comes with them. For buy-and-hold investors building long-term wealth, VTI's lower costs and wider market coverage make more sense. Active traders or those who prefer the familiarity of blue-chip names might justify SPY's higher fees.

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.

FAQ

What is better, VTI or SPY?

Neither is inherently better - it depends what you want. SPY has slightly outperformed with 15.63% over 10 years versus VTI's 15.29%, and carries marginally lower volatility at 10.98% compared to 11.38%. However, VTI gives you the entire US stock market including small and mid-cap companies for just 0.03% in fees, while SPY only covers large caps and charges 0.10%. The choice comes down to whether you prefer broader diversification or the familiarity of S&P 500 companies.

What is the 10-year average return on VTI?

VTI has delivered a 10-year average return of 15.29%, slightly trailing SPY's 15.63% over the same period. The difference amounts to about 0.34% annually, which roughly matches the gap in their expense ratios.

Does SPY outperform VTI?

SPY has slightly outperformed VTI recently, with 1-year returns of 14.36% vs 14.07% and 3-year returns of 21.41% vs 20.81%. However, the difference is minimal, and both funds have delivered nearly identical 10-year returns of around 15.3%. The performance gap is small enough that it could easily flip in different time periods, so neither fund has a clear long-term advantage over the other.

Does VTI pay dividends?

Yes, VTI pays dividends with a current yield of 1.12%. The fund distributes quarterly payments based on the dividends received from its underlying holdings, which span the entire U.S. stock market including large, mid, and small-cap companies.

Which ETF has the lower expense ratio?

VTI has the lower expense ratio at 0.03% compared to SPY's 0.10%. This 0.07 percentage point difference means VTI costs $3 per $10,000 invested annually versus $10 for SPY.

How much broader is VTI’s coverage than SPY?

VTI holds about 4,000 stocks compared to SPY's 500, giving you exposure to the entire U.S. market including small and mid-cap companies that SPY misses. The difference shows up in their sector weights too, VTI has 10.5% in consumer cyclicals while SPY puts 10.8% in communication services, reflecting their different approaches to market coverage.

Which ETF is more volatile?

SPY shows slightly lower volatility with 10.98% over one year compared to VTI's 11.38%, and the same pattern holds over three years with SPY at 11.94% versus VTI's 12.56%. The difference isn't dramatic, but SPY has been the steadier ride.

How do I choose between total-market and S&P 500 exposure?

The choice comes down to whether you want the full US market or just the biggest companies. VTI gives you everything from mega-caps to small-caps for just 0.03% annually, while SPY's 0.10% fee gets you purely the S&P 500 with slightly less volatility (10.98% vs 11.38% over one year). The returns have been remarkably similar, with SPY edging out VTI by about 0.3-2 percentage points across most timeframes, but VTI's broader diversification includes mid and small-cap exposure that some investors prefer.

How have VTI and SPY performed year-to-date (2026)?

VTI has gained 1.58% year-to-date in 2026, while SPY is up 1.07% over the same period. The 0.51 percentage point difference reflects VTI's broader market exposure beyond just large-cap stocks.