One of the key benefits of exchange traded funds (ETFs) is that they can offer immediate portfolio exposure to hundreds or even thousands of stocks. In that vein, two popular choices among patient investors are the Vanguard S&P 500 ETF (NYSEARCA:VOO | VOO Price Prediction) and the Vanguard Total Stock Market Index Fund ETF (NYSEARCA:VTI).
For minimal management fees and reliable dividends, you won’t do much better than these two Vanguard funds. I’d call VOO and VTI smart-money picks, but which one is smarter for folks seeking long-term returns? That’s today’s billion-dollar question, so let’s do a head-to-head comparison and see which ETF comes out on top.
Vanguard Keeps the Costs Down
Besides the fact that VOO and VTI are both Vanguard funds, there are other similarities between these two funds. In some ways, they’re practically indistinguishable.
Just to recap the basics, the Vanguard S&P 500 ETF is one of the most established ETFs tracking the S&P 500. I’ve identified the VOO ETF as a must-own asset, and I’ll tell you why right now.
I believe it’s smart to own at least one low-cost index fund, and the Vanguard S&P 500 ETF is about as low-cost as it gets. VOO’s expense ratio — a percentage which expresses the operating expenses that are automatically deducted from the share price on an annualized basis — is only 0.03%.
To put it another way, the Vanguard S&P 500 ETF only deducts $0.03 worth of management fees per year for every $100 you’d invest in the fund. That’s a rock-bottom price to pay for portfolio exposure to around 500 stocks.
But then, the same thing can be said about the Vanguard Total Stock Market Index Fund ETF. This Vanguard fund doesn’t only cover the large-cap stocks in the S&P 500 like VOO does. Instead, it comprises a vast quantity of large-, mid-, and small-cap stocks.
As it turns out, the Vanguard Total Stock Market Index Fund ETF’s expense ratio also happens to be 0.03%. Therefore, in that respect, it’s a tie between VOO and VTI.
Different ETFs With Similar Yields
Smart investors, I believe, also own at least one yield-producing fund. Thankfully, the VOO and VTI ETFs reward their loyal shareholders with quarterly cash payments.
While the Vanguard S&P 500 ETF features a 1.17% expected annual dividend yield, the Vanguard Total Stock Market Index Fund ETF’s anticipated yield is 1.16%. Again, we’re confronted with a strong similarity between these two Vanguard funds.
By the way, be aware that dividend yields can change over time. Thus, it’s a smart idea to frequently monitor the expected annual yields of the Vanguard S&P 500 ETF and the Vanguard Total Stock Market Index Fund ETF for changes. That said, I’ve found that Vanguard has been generally reliable in keeping the annual yields of VOO and VTI steady.
One ETF Is More Diversified
Now, it’s a good time to take note of the main differences between these two Vanguard ETFs. As you may be aware, the Vanguard S&P 500 ETF is a broad-based fund that spans hundreds of stocks across multiple economic sectors.
Within the holdings list of the Vanguard S&P 500 ETF, you’ll find large-cap giants like Coca-Cola (NYSE:KO), Apple (NASDAQ:AAPL), Home Depot (NYSE:HD), and Exxon Mobil (NYSE:XOM). From technology to consumer staples, energy to utilities and more, you’ll see familiar U.S.-based businesses representing many categories in the VOO ETF.
Yet, believe it or not, the Vanguard S&P 500 ETF isn’t the most diversified Vanguard fund. Whereas the VOO ETF represents around 500 firms, the Vanguard Total Stock Market Index Fund ETF includes nearly 3,500 stocks in its holdings list.
Sure, you’ll find Coca-Cola and Apple within the VTI ETF, but you’ll also notice many mid-cap and small-cap stocks. A few of the more intriguing names in the Vanguard Total Stock Market Index Fund ETF’s holdings list are SkyWater Technology (NASDAQ:SKYT), Natural Gas Services Group (NYSE:NGS), and Emergent BioSolutions (NYSE:EBS).
It’s fine if you’ve never heard of these lesser-known companies. What matters is that the Vanguard Total Stock Market Index Fund ETF takes tiny positions in thousands of businesses. If some of them fail, that’s fine because others will probably succeed and keep the Vanguard Total Stock Market Index Fund ETF afloat.
The Returns Make the Difference
Although the VTI ETF is more diversified than the VOO ETF, many investors feel that the long-term returns are the bottom line. Since the two funds’ fees and yields are so similar, this leads us to the question of which Vanguard fund has delivered the highest share-price returns.
As of September 2, 2025, the Vanguard S&P 500 ETF’s share price increased by 78.55% over the past five years. How does that performance stack up against the Vanguard Total Stock Market Index Fund ETF?
During the same time frame, the Vanguard Total Stock Market Index Fund ETF’s rose 73.88%. That’s impressive, but it doesn’t beat the VOO ETF.
The takeaway here, then, is that VTI’s broader diversification can provide an added sense of safety but might also sacrifice share-price results when compared to VOO. Personally, I feel that the Vanguard S&P 500 ETF is still highly diversified even if not as much as the Vanguard Total Stock Market Index Fund ETF, and the enhanced potential returns make VOO’s extra risk worthwhile.
Nevertheless, even if the VOO ETF looks like the smarter Vanguard fund for long-term returns, don’t dismiss the VTI ETF outright. Consider a portfolio position in both of these perfectly fine funds, if you’d like, to partake of a multitude of stocks today.
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