VTI vs. ITOT: How These Popular Total Stock Market ETFs Compare on Cost, Returns, and Diversification

Core Insights - The iShares Core S&P Total US Stock Market ETF (ITOT) and the Vanguard Total Stock Market ETF (VTI) provide low-cost, diversified U.S. equity exposure but differ in fund size, number of holdings, and sector weightings [1][2] Cost & Size Comparison - Both ITOT and VTI have an expense ratio of 0.03% and similar dividend yields, with ITOT at 1.09% and VTI at 1.11% [3] - As of January 3, 2025, ITOT has a one-year return of 14.69%, while VTI has a return of 14.76% [3] - ITOT has assets under management (AUM) of $80 billion, whereas VTI has a significantly larger AUM of $567 billion [3] Performance & Risk Comparison - The maximum drawdown over five years for ITOT is -25.35%, while VTI is slightly higher at -25.36% [4] - A $1,000 investment would grow to $1,730 in ITOT and $1,728 in VTI over five years, indicating very similar performance [4] Holdings & Sector Exposure - VTI tracks the CRSP US Total Market Index and holds 3,527 stocks, with technology making up 35% of its assets, followed by financial services at 13% and consumer cyclical at 11% [5] - ITOT holds 2,498 stocks, with a sector allocation of 34% in technology, 13% in financial services, and 10% in consumer cyclical [6] - Both ETFs avoid leverage, currency hedging, or ESG screens, maintaining straightforward investment strategies [6] Investor Considerations - VTI offers greater diversification due to its larger number of holdings, making it more suitable for investors seeking maximum market exposure [8] - The larger AUM of VTI provides greater liquidity, allowing for larger transactions without significantly impacting the ETF's price [9] - Overall, both funds are nearly indistinguishable in terms of fees and performance, with AUM and number of holdings being the primary differentiators [11]