VTI vs. SPY: Which Popular Broad Market ETF Is the Best Choice for Investors Right Now?

Core Insights - The article compares two popular U.S. equity ETFs: the State Street SPDR S&P 500 ETF Trust (SPY) and the Vanguard Total Stock Market ETF (VTI), highlighting their differences in cost, diversification, and holdings [1][2] Cost and Size Comparison - SPY has an expense ratio of 0.09%, while VTI is more affordable at 0.03%, making it appealing for cost-conscious investors [3] - As of February 5, 2026, SPY's one-year return is 13.13% compared to VTI's 12.43%, and SPY has an AUM of $709 billion versus VTI's $571 billion [3] Performance and Risk Comparison - Over the past five years, SPY has a maximum drawdown of -24.50%, while VTI's is -25.36%, indicating slightly better risk management for SPY [4] - A $1,000 investment in SPY would have grown to $1,764 over five years, compared to $1,656 for VTI, suggesting stronger cumulative growth for SPY [4] Holdings and Diversification - VTI holds approximately 3,600 stocks across all market capitalizations, with significant allocations in technology (33%), financial services (13%), and consumer cyclical (10%) [5] - SPY focuses on the S&P 500, with a heavier weighting in technology (34%), financial services (13%), and communication services (11%) [6] Implications for Investors - SPY's focus on large-cap stocks may reduce volatility, as larger companies tend to be more stable during economic downturns [8] - VTI's broad diversification across the entire stock market can help manage volatility, providing a buffer against poor performance in specific sectors [9] - Both ETFs have shown similar total returns over one and five years, with SPY slightly outperforming VTI in both periods [10]