Vanguard and iShares Total U.S. Stock Market ETFs Show Minimal Difference in Cost and Performance

The Vanguard Total Stock Market ETF (NYSEMKT:VTI) and the iShares Core S&P Total U.S. Stock Market ETF (NYSEMKT:ITOT) have proven to be remarkably similar in terms of cost and performance, despite the significantly larger asset base managed by the former.

According to data from Lipper, a leading provider of fund research and analysis, both funds have consistently delivered comparable results over the past year, with VTI boasting an average annual return of 13.1 percent compared to ITOT’s 12.9 percent. Moreover, their expense ratios are virtually identical, standing at 0.04 percent for VTI and 0.03 percent for ITOT.

While Vanguard’s fund has managed a substantial asset base of over $70 billion, iShares’ ITOT has struggled to gain significant traction, with assets totaling just over $4 billion. However, investors have been drawn to both funds due to their comprehensive coverage of the U.S. stock market, holding nearly 1,000 of the largest and most liquid stocks.

Despite these similarities, investors may still be inclined to choose one fund over the other based on individual preferences or investment strategies. For those prioritizing cost-effectiveness, ITOT’s slightly lower expense ratio might provide a marginal advantage. On the other hand, VTI’s more substantial asset base could potentially offer greater stability and diversification benefits. Ultimately, investors should carefully weigh their options before making an informed decision.

Source: original report.