VTI or VOO: Which Vanguard ETF Should You Buy During a Market Sell-Off?
Key Points
The Vanguard S&P 500 ETF (VOO) focuses on U.S. large-cap stocks.
The Vanguard Total Stock Market ETF (VTI) invests in U.S. companies of all sizes.
Smaller companies typically underperform during market downturns.
- 10 stocks we like better than Vanguard S&P 500 ETF ›
The Vanguard Total Stock Market ETF (NYSEMKT: VTI) and the Vanguard S&P 500 ETF (NYSEMKT: VOO) may look very similar in composition, fees, and performance. In reality, they are. But the markets they target are very different.
The fact that one fund owns around 500 stocks and the other owns more than 3,500 is just one thing that differentiates the two. Those differences that only become obvious when you look under the hood can make one preferable to another, especially during market sell-offs.
Will AI create the world's first trillionaire? Our team just released a report on the one little-known company, called an "Indispensable Monopoly" providing the critical technology Nvidia and Intel both need. Continue »
Image source: Getty Images.
Key takeaways
- The big differentiator: VOO focuses only one large caps while VTI invests in large, mid, and small caps.
- Because both exchange-traded funds (ETFs) are market-cap-weighted, portfolio compositions look quite similar. But VTI's inclusion of small caps makes it more diversified.
- In environments where megacap tech isn't leading the market, VTI could be expected to outperform.
- In a market sell-off, VOO should outperform, assuming small caps do worse than large caps.
VOO vs. VTI: How they're built and what separates them
Given that these two funds are market-cap-weighted portfolios consisting of U.S. stocks, they'll always be highly correlated to each other. But the Vanguard Total Stock Market ETF invests in about 3,000 additional companies beyond just the S&P 500.
There's about 88% overlap between the two funds, which means the difference is a 12% allocation to small and mid caps in the Vanguard Total Stock Market ETF that the S&P 500 ETF doesn't have. Which ETF holds up better in a market downturn really depends on how that small-/mid-cap allocation is likely to perform.
VOO vs. VTI: Performance & metrics
| Metric | VOO | VTI |
|---|---|---|
| Expense ratio | 0.03% | 0.03% |
| Assets under management | $910 billion | $615 billion |
| Dividend yield | 1.2% | 1.2% |
| 10-year average annual return | 15% | 14.5% |
| Holdings | 504 | 3,507 |
| Top holdings | Nvidia (7.6%), Apple (6.7%), Microsoft (4.9%) | Nvidia (6.4%), Apple (5.9%), Microsoft (4.4%) |
Data source: Vanguard.
The performance gap between these two ETFs is clearly due to the outperformance of megacap tech stocks over the past several years. The artificial intelligence (AI) boom resulted in just a handful of stocks pulling the averages higher. Both funds had large allocations to the "Magnificent Seven" names, but the S&P 500's was larger, as is evidenced by the top individual holdings of each ETF.
In stock market downturns, it's typical to see small caps lagging large caps. While both groups are very likely to fall, investors generally prefer the relative safety and durability of more well-established companies. Small caps as a whole are more speculative and less profitable. That's usually not where investors focus their money in challenging markets.
Given this, the Vanguard S&P 500 ETF is likely the better buy in a market downturn. It has relatively better top-to-bottom strength in its holdings. That should help give it a modest performance edge.
Should you buy stock in Vanguard S&P 500 ETF right now?
Before you buy stock in Vanguard S&P 500 ETF, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Vanguard S&P 500 ETF wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $497,606!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,306,846!*
Now, it’s worth noting Stock Advisor’s total average return is 985% — a market-crushing outperformance compared to 200% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
See the 10 stocks »
*Stock Advisor returns as of April 29, 2026.
David Dierking has positions in Apple and Vanguard Total Stock Market ETF. The Motley Fool has positions in and recommends Apple, Microsoft, Nvidia, and Vanguard S&P 500 ETF. The Motley Fool has a disclosure policy.
Recommended Articles
