If you want broad exposure to the U.S. stock market, two Vanguard ETFs are the clear and obvious candidates: the Vanguard S&P 500 ETF (VOO 1.16%) and the Vanguard Total Stock Market ETF (VTI 1.28%). While they both do a good job of covering the U.S. equity market, the Total Stock Market ETF covers more ground, including small caps and mid-caps in the mix.
Over the past several years, that added coverage hasn't helped. Large caps have, by a fairly substantial margin, outperformed smaller company stocks, and that's created a performance drag for that fund relative to the S&P 500 (^GSPC 1.25%).
As a long-term investment, both are still great options for investors. But you should understand the advantages and disadvantages of each before choosing.
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What's inside these two ETFs
The Vanguard S&P 500 ETF does exactly what the name suggests. It tracks the S&P 500, giving investors exposure to roughly 500 of the largest publicly traded companies in the United States. That includes heavy weightings to megacap tech companies, including Apple, Microsoft, Nvidia, Amazon, Alphabet, Meta Platforms, and Tesla.
The Vanguard Total Stock Market ETF takes a broader approach. It owns the S&P 500 stocks, but also owns more than 3,500 other stocks across large-cap, mid-cap, and small-cap companies.
Essentially, the decision of which of the two ETFs you'd want to own comes down to whether or not you want small caps in your portfolio.
As is the case with many Vanguard ETFs, investors pay a minimal price to own the funds. Both funds come with expense ratios of just 0.03%, meaning you'd pay only $3 a year in fees for every $10,000 invested.
NYSEMKT: VOO
Key Data Points
Historical performance
Over long periods of time, the performance gap between the S&P 500 ETF and the Total Stock Market ETF is likely to be relatively small. Over the past several years, however, that obviously hasn't been the case. The narrow bull market in tech and artificial intelligence (AI) stocks has given large caps a modest performance advantage.
Over the past five years (as of Jan. 13), the S&P 500 ETF has returned an average of 14.45% compared to a 13.05% average annual return for the Total Stock Market ETF. The heavy large-cap exposure of both funds has kept the gap small, but there's little question that small caps have been a drag lately.
The early stages of 2026 have yielded a reversal of this trend. The S&P 500 ETF's performance is trailing by a 2.11% to 1.74% margin year to date.
NYSEMKT: VTI
Key Data Points
Which ETF is the better buy?
For investors who want simple, large-cap U.S. stock exposure, the Vanguard S&P 500 ETF is an excellent choice. It owns the market's biggest companies and has a long track record of delivering strong risk-adjusted returns.
Personally, I think the Vanguard Total Stock Market ETF is the better buy. I prefer its broader diversification and exposure to smaller companies. The fact that the market is beginning to recognize some of their value and has been out of favor for so long suggests some added upside potential. Even though they've lagged in recent years, their addition to a large-cap-heavy portfolio should spread out some risk and offer the potential to enhance returns long term.
