VTI vs VUG: Side-by-Side ETF Comparison

VTI vs VUG: VTI gives you the entire U.S. market at 0.03% with a 1.12% dividend yield, while VUG focuses only on growth stocks - charging 0.04% and yielding just 0.41%. The growth focus shows in VUG's steeper 29.7 P/E versus VTI's 21.5, with tech making up 52% of VUG but only 33% of 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

Vanguard offers both funds, but their investment approaches sit at opposite ends of the spectrum. VTI tracks the entire U.S. stock market - every large, mid, small and micro-cap stock you can buy. At 0.03% annually, it's one of the cheapest ways to own a piece of American business. The fund spreads your money across nearly 4,000 companies, with technology making up 33% and the next biggest sector just 13%.

VUG takes a different path. It only owns large growth companies - think Apple, Microsoft, Amazon - and charges 0.04% for this focused approach. Technology dominates here at 52% of holdings, with communication services adding another 16%. The result is a portfolio of about 250 stocks with a 29.7 P/E ratio, significantly higher than VTI's 21.5. This concentration means when growth stocks rally, VUG typically soars. When they fall, it drops harder. VTI's broad diversification smooths out those swings, though it won't capture the full upside of growth rallies either.

Your choice depends on what you want from your U.S. stock exposure. VTI gives you the whole market in one fund - growth, value, large and small companies all together. VUG bets specifically on large companies that investors expect to grow faster than average. Neither approach is inherently better, but they serve different purposes in a portfolio.

Annual & Cumulative Returns

VUG's growth focus has delivered superior long-term results, particularly over the past decade where it outpaced VTI by nearly 3 percentage points annually. The difference becomes even more pronounced over three years, with VUG's 28.58% return significantly exceeding VTI's 20.81%. This reflects how growth stocks, especially the technology giants that comprise over half of VUG's holdings, have dominated market returns during this period.

Yet the recent past tells a different story. VTI has eked out small advantages in the year-to-date and one-year periods, suggesting growth stocks may be losing some momentum. The narrow 0.08 percentage point difference over one year shows how tightly matched these funds can be in shorter timeframes. For investors, this pattern suggests VUG works best as a long-term holding that requires patience through growth stock underperformance, while VTI offers more consistent returns across various market cycles with less dramatic swings between leadership styles.

Risk Metrics

VUG's 16% one-year volatility sits noticeably above VTI's 11.4%, and this gap holds across longer periods. The growth fund's heavier tech weighting (52.5% vs 33.2%) explains most of the difference - when sentiment shifts, those high-multiple stocks swing harder than the broad market's financial and industrial names that VTI owns.

What's interesting is that VUG's higher volatility hasn't hurt risk-adjusted returns. Its three-year Sharpe ratio of 1.59 beats VTI's 1.29, meaning investors collected more return per unit of risk despite the bumpier ride. The trade-off is clear: VTI gives you a smoother path with less drama, while VUG demands stronger nerves but has compensated patient holders for the extra turbulence.

Dividend Yield & Growth

VTI's 1.12% yield isn't exactly generous, but it's nearly triple VUG's 0.41%. That gap reflects the underlying companies: VTI owns everything from utilities to banks, sectors that actually share profits with shareholders. VUG's growth-focused portfolio behaves differently - most of its holdings reinvest earnings rather than pay dividends, which explains why 52.5% sits in technology companies that typically favor buybacks over distributions.

Neither fund will generate meaningful income, so your choice depends on priorities. If you want some cash flow while maintaining broad market exposure, VTI delivers modest quarterly payments. VUG investors essentially trade away current income for potential future growth - a reasonable bet if you're comfortable with a tech-heavy portfolio and don't need the money now. Both pay dividends (VUG quarterly too, despite the data gap), but neither yield approaches what you'd find in dedicated dividend funds.

Fees & Liquidity

VTI's 0.03% expense ratio saves you one basis point over VUG's 0.04%, which adds up to roughly a dollar difference per year on a $10,000 position. Both funds trade millions of shares daily with penny-wide spreads, so your real cost isn't the management fee - it's how long you plan to hold. The gap widens slightly when you factor in VTI's 1.12% dividend yield against VUG's 0.41%, since the growth fund's lower distributions mean less drag from taxes in taxable accounts.

For most investors, the fee difference falls into the rounding-error category. A 401(k) with $50,000 split between these funds would save about $5 annually by choosing VTI, less than a single lunch. The bigger consideration is whether you want the market-weighted simplicity of total-market exposure or the concentrated growth bet that comes with VUG's 52% technology weighting. Pick the fund that matches your strategy; don't let the basis point sway the decision.

ETF Composition: Asset Classes

VTI spreads your money across nearly the entire U.S. market just shy of 99 percent in domestic stocks while sprinkling a half-percent abroad and holding a sliver of cash for daily fund operations. That microscopic 0.4 percent cash stake, plus a touch of “other,” keeps tracking tight without dragging on returns. VUG looks almost identical at first glance: 99.6 percent in U.S. equities and even less overseas. The difference shows up in the cash drawer; VUG keeps only 0.16 percent on the sidelines, a reflection of its narrower, large-cap focus that turns the portfolio over less often.

For investors, the takeaway is subtle but useful. Both funds keep foreign exposure below one percent, so currency swings won’t move the needle. VTI’s slightly higher cash and “other” slice is a by-product of holding small-caps, which require a bit more liquidity management. Unless you’re running a very tight asset-allocation model, the gap is too small to sway the decision; pick the fund for the stocks it owns, not for the few basis points sitting in money-market residuals.

Regional Allocation

VTI keeps virtually everything at home. Over 99% of its holdings trade in North America, with the remaining half-percent scattered across developed Europe, the UK, and a few emerging Asian listings that happen to list as ADRs in New York. That tiny foreign footprint is a rounding error; you're still getting a fund that behaves like a pure U.S. benchmark.

VUG dispenses with the fiction entirely: the portfolio is booked as 100% North American. Because it chases large-cap growth names, and the fastest-growing U.S. giants tend to list domestically, there's simply no need to reach for London or Hong Kong share classes. For investors, the difference is mostly cosmetic both ETFs will rise and fall with the dollar and domestic sentiment but if you care about even a sliver of international listing diversification, VTI technically offers it while VUG does not.

Sector Weights

VUG's technology allocation jumps off the page at 52.5% - that's nearly double VTI's already hefty 33.2% tech weighting. The concentration doesn't stop there. Add in communication services at 16.5% and you're looking at almost 70% of VUG parked in just two sectors. Meanwhile, VTI spreads things thinner. Financial services gets 13.3%, consumer cyclicals 10.5%, and healthcare weighs in at 10.3%. Nothing approaches tech's dominance.

The numbers tell a clear story about what each fund is trying to do. VUG bets big on growth sectors while virtually ignoring traditional industries - energy sits at 0.3%, basic materials 0.7%. VTI keeps a toe in everything. Even unloved sectors like utilities and real estate get 2-3% each. This explains why VTI trades at 21.5x earnings while VUG commands 29.7x. You're paying for concentrated growth bets with VUG, or getting a slice of the entire market with VTI.

Top 10 Holdings

The same five tech giants sit at the top of both funds, yet VUG's growth mandate doubles their weightings. NVIDIA, Apple, and Microsoft each claim roughly twice the footprint in VUG (12.73%, 11.88%, 10.63%) compared with VTI's more modest 6.56%, 6.12%, 5.48%. That 53% combined concentration in just three names shows how a growth screen naturally funnels money toward the market's biggest winners, while VTI's broader brief keeps any single stock below 7%.

This concentration gap explains why VUG's technology allocation swells to 52.5% versus VTI's still-hefty 33.2%. A portfolio anchored in VUG will therefore rise and fall with the fortunes of a handful of mega-caps far more than one built on VTI. The trade-off is straightforward: VUG offers purer exposure to momentum-driven names, VTI provides a more balanced cushion when leadership rotates away from the giants.

Valuation & Growth Metrics

VUG trades at a 38% premium to the broad market, with its 29.7 P/E towering over VTI's 21.5. The gap widens further on price-to-book: VUG's 9.6 multiple means you're paying more than double what VTI investors shell out for each dollar of net assets. These richer valuations reflect the market's willingness to pay up for VUG's tech-heavy lineup - over half the portfolio sits in technology names versus 33% for VTI.

Yet the growth story gets murky beyond headline numbers. While VUG companies grew historical earnings at a blistering 24% clip, their sales actually shrank 12.5% as VTI holdings managed positive (if modest) revenue expansion. Long-term earnings projections favor VUG at 12.2% versus 10.6%, but that modest edge may not justify the valuation stretch. For investors, the choice boils down to whether you believe today's premium multiples will hold as growth inevitably normalizes across market cycles.

Which ETF Fits Your Portfolio?

VTI gives you the whole market in one package. At 0.03% in fees, you're paying practically nothing to own 4,000 stocks across every sector and size. The 1.12% dividend yield puts real cash in your pocket every quarter, something growth investors often forget about until markets turn rocky.

VUG takes the opposite approach - it's a pure bet on large companies that keep expanding faster than the economy. With 52% in tech and a P/E of 29.7, you're paying up for that growth, but you get zero exposure to value stocks or smaller companies that might outperform when the market rotates. The choice really comes down to whether you want to own everything or just the expensive parts of the market that have worked lately.

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.