SPTM and VTI Both Offer Low-Cost Broad U.S Market Exposure, but Which Is the Better Buy?

Core Insights - The Vanguard Total Stock Market ETF (VTI) and the State Street SPDR Portfolio S&P 1500 Composite Stock Market ETF (SPTM) serve as foundational investment options for diversified exposure to the U.S. stock market [1][8] Cost and Size Comparison - Both VTI and SPTM have an identical expense ratio of 0.03% and similar dividend yields, making them equally affordable for investors [3] - VTI has a significantly larger asset under management (AUM) of $571 billion compared to SPTM's $12 billion, indicating greater liquidity for VTI [3][10] Performance and Risk Analysis - Over the past year, VTI has returned 13.55% while SPTM has returned 13.45%, showing nearly identical performance [3] - The maximum drawdown over five years for VTI is -25.36%, while SPTM's is -24.15%, indicating comparable risk profiles [4] Holdings and Sector Allocation - SPTM tracks the S&P Composite 1500 Index and includes 1,511 U.S. stocks, with a sector allocation of 34% in technology, 13% in financial services, and 11% in consumer cyclical [5][6] - VTI tracks the CRSP US Total Market Index and holds over 3,500 stocks, with a similar sector allocation of 33% in technology, 13% in financial services, and 11% in consumer cyclical [7] Investment Implications - Both ETFs provide broad, low-cost access to the U.S. stock market, with VTI offering more diversification due to its larger number of holdings [9] - The choice between VTI and SPTM may depend on investor preference for fund size or index coverage, as both are strong options for core U.S. equity holdings [10]