It's not as though large caps are guaranteeing capital gains instead. Im lookimg to invest long term (10-20 yrs) in taxable account. Vanguard’s Total Stock Market ETF (VTI) is similar to VOO in many ways, but the main difference is that it holds a much broader range of stocks. If so, then I guess I’d have to TLH from VTI into something other than VOO (in taxable) for this to work going forward, correct? No, it doesn’t have the extended market (mid-caps and small caps) that the total market fund does, but its performance is going to be very similar. Both VTI and VOO are ETFs. I am planning on setting up my 1st taxable acct with Fidelity (for convenience, all my other accounts there). For instance, the S&P 500 contains, well 500 stocks that change over time. He was long LABD. For a taxable account, the difference is minor. For reasons that go far beyond the scope of this article, if you have the choice between an ETF or a mutual fund, and both track the same or very similar index, you're almost always better off with the ETF. These indices weight the allocation based on the market cap of the company divided by the market cap of all the companies added together. I am a pulm-ccm physician in the South-wife is an MD as well. Vanguard started the ETF revolution. However, I’m now interested to add muni bonds, and to my knowledge there is no such ETF at Vanguard (not to mention that Bill Bernstein doesn’t believe in … Granted, it's not a good idea to hold taxable-bond funds in a taxable account if you're a high-income investor, but the tax-efficiency statistics are even worse for bond funds. The tax benefits of retirement accounts are well known. VTI is a much larger fund, with over $500 Billion in assets. For those looking to build around the VOO ETF, they’ve picked a good one. TPM started Turning Point Money blog in 2017 after spending 20 years designing financial ERP systems for large corporations.He has an MBA in finance and has been a DIY investor for 22 years.He loves reading, saving and investing in individual stocks and other passive investments. VTI vs. VTSAX: Identical Investments As an investment, VTI and VTSAX are completely identical. VFIAX vs. VOO: The Basics. This represents the entire US stock market. For the purpose of comparing VOO and VTI, an ETF as a basket of stocks that track an index. By using our Services or clicking I agree, you agree to our use of cookies. Always conduct your own due diligence or seek out help from professionals. Nothing written on this website or mentioned in the comments should be considered advice. Below is a comparison ordered by the various factors, in the rough order of importance. There are two ways to purchase a total stock market index fund at Vanguard. These are generally the best of the best. Great Taxable Account ETFs #4: Vanguard High Dividend Yield ETF (VYM) For investors looking for a bit more income from their taxable accounts have to turn to stocks to find it. The writer of this blog is not an investment professional. If you have $10k in the VOO you're only paying $3.00 per year so the difference between the 2 investments is minimal in real dollars. ._2a172ppKObqWfRHr8eWBKV{-ms-flex-negative:0;flex-shrink:0;margin-right:8px}._39-woRduNuowN7G4JTW4I8{border-top:1px solid var(--newCommunityTheme-widgetColors-lineColor);margin-top:12px;padding-top:12px}._3AOoBdXa2QKVKqIEmG7Vkb{font-size:12px;font-weight:400;line-height:16px;-ms-flex-align:center;align-items:center;background-color:var(--newCommunityTheme-body);border-radius:4px;display:-ms-flexbox;display:flex;-ms-flex-direction:row;flex-direction:row;margin-top:12px}.vzEDg-tM8ZDpEfJnbaJuU{color:var(--newCommunityTheme-button);fill:var(--newCommunityTheme-button);height:14px;width:14px}.r51dfG6q3N-4exmkjHQg_{font-size:10px;font-weight:700;letter-spacing:.5px;line-height:12px;text-transform:uppercase;display:-ms-flexbox;display:flex;-ms-flex-pack:justify;justify-content:space-between}._2ygXHcy_x6RG74BMk0UKkN{margin-left:8px}._2BnLYNBALzjH6p_ollJ-RF{display:-ms-flexbox;display:flex;margin-left:auto}._1-25VxiIsZFVU88qFh-T8p{padding:0}._3BmRwhm18nr4GmDhkoSgtb{color:var(--newCommunityTheme-bodyText);-ms-flex:0 0 auto;flex:0 0 auto;line-height:16px} Get your ETF recommendation online. Choosing the best Vanguard funds for taxable accounts requires more of a strategic approach than the fund selection process requires for tax-deferred accounts like IRAs and 401(k)s. It's important to analyze the tax efficiency of the funds, which … VTSAX has a higher expense ratio than VOO (0.04% vs 0.03%). Contact us. Please see our full disclaimer. I am 68 years old.
ITOT vs. VTI: Head-To-Head ETF Comparison The table below compares many ETF metrics between ITOT and VTI. So the more volatile mid and small cap stock holdings will very modestly affect the total return of VTI since it only comprises the remaining 20%. I am 32, I have $20k in a 401k, $6500 in a Roth IRA and $60k in a regular savings account (stupid I know). Instead, they could buy VOO, which trades just like an individual stock. I’m aware VOO is only to large-cap companies while VTI invests in everything including small and mid-caps. The VTI index fund tracks the CRSP US Total Market Index. This website is a personal finance blog. The dividend yield for VOO (2.07%) is slightly higher than that of VTI (1.97%), which could be a small consideration for investors who prefer index funds with higher yields. ._3Im6OD67aKo33nql4FpSp_{border:1px solid var(--newCommunityTheme-widgetColors-sidebarWidgetBorderColor);border-radius:5px 5px 4px 4px;overflow:visible;word-wrap:break-word;background-color:var(--newCommunityTheme-body);padding:12px}.lnK0-OzG7nLFydTWuXGcY{font-size:10px;font-weight:700;letter-spacing:.5px;line-height:12px;text-transform:uppercase;padding-bottom:4px;color:var(--newCommunityTheme-navIcon)} The higher the turnover the more likely there is going to bea tax impact. Yes, it is perfectly reasonable to invest in index funds and individual securities! The diversification benefits of VTI outweigh the QDI advantage of VOO in my opinion. However, for S&P 500 ETFs, they only have the third-largest ETF. The weighting is determined by the market capitalization of the companies. For the core fixed-income exposure for retirement accumulators; taxable accounts, I employed the Silver-rated Vanguard Tax-Exempt Bond (VTEB). VTI tracks the CRSP US Total Market Index. VTI is slightly better than VOO, but they're invested in 80% the same stuff and are both excellent choices. We have the VTI and SPY along w/ Dows-ETFdifferent accounts. In this section we will compare the VOO vs VTI. They make great tax loss harvesting partners in taxable accounts. .Rd5g7JmL4Fdk-aZi1-U_V{transition:all .1s linear 0s}._2TMXtA984ePtHXMkOpHNQm{font-size:16px;font-weight:500;line-height:20px;margin-bottom:4px}.CneW1mCG4WJXxJbZl5tzH{border-top:1px solid var(--newRedditTheme-line);margin-top:16px;padding-top:16px}._11ARF4IQO4h3HeKPpPg0xb{transition:all .1s linear 0s;display:none;fill:var(--newCommunityTheme-button);height:16px;width:16px;vertical-align:middle;margin-bottom:2px;margin-left:4px;cursor:pointer}._1I3N-uBrbZH-ywcmCnwv_B:hover ._11ARF4IQO4h3HeKPpPg0xb{display:inline-block}._2IvhQwkgv_7K0Q3R0695Cs{border-radius:4px;border:1px solid var(--newCommunityTheme-line)}._2IvhQwkgv_7K0Q3R0695Cs:focus{outline:none}._1I3N-uBrbZH-ywcmCnwv_B{transition:all .1s linear 0s;border-radius:4px;border:1px solid var(--newCommunityTheme-line)}._1I3N-uBrbZH-ywcmCnwv_B:focus{outline:none}._1I3N-uBrbZH-ywcmCnwv_B.IeceazVNz_gGZfKXub0ak,._1I3N-uBrbZH-ywcmCnwv_B:hover{border:1px solid var(--newCommunityTheme-button)}._35hmSCjPO8OEezK36eUXpk._35hmSCjPO8OEezK36eUXpk._35hmSCjPO8OEezK36eUXpk{margin-top:25px;left:-9px}._3aEIeAgUy9VfJyRPljMNJP._3aEIeAgUy9VfJyRPljMNJP._3aEIeAgUy9VfJyRPljMNJP,._3aEIeAgUy9VfJyRPljMNJP._3aEIeAgUy9VfJyRPljMNJP._3aEIeAgUy9VfJyRPljMNJP:focus-within,._3aEIeAgUy9VfJyRPljMNJP._3aEIeAgUy9VfJyRPljMNJP._3aEIeAgUy9VfJyRPljMNJP:hover{transition:all .1s linear 0s;border:none;padding:8px 8px 0}._25yWxLGH4C6j26OKFx8kD5{display:inline}._2YsVWIEj0doZMxreeY6iDG{font-size:12px;font-weight:400;line-height:16px;color:var(--newCommunityTheme-metaText);display:-ms-flexbox;display:flex;padding:4px 6px}._1hFCAcL4_gkyWN0KM96zgg{color:var(--newCommunityTheme-button);margin-right:8px;margin-left:auto;color:var(--newCommunityTheme-errorText)}._1hFCAcL4_gkyWN0KM96zgg,._1dF0IdghIrnqkJiUxfswxd{font-size:12px;font-weight:700;line-height:16px;cursor:pointer;-ms-flex-item-align:end;align-self:flex-end;-webkit-user-select:none;-ms-user-select:none;user-select:none}._1dF0IdghIrnqkJiUxfswxd{color:var(--newCommunityTheme-button)}._3VGrhUu842I3acqBMCoSAq{font-weight:700;color:#ff4500;text-transform:uppercase;margin-right:4px}._3VGrhUu842I3acqBMCoSAq,.edyFgPHILhf5OLH2vk-tk{font-size:12px;line-height:16px}.edyFgPHILhf5OLH2vk-tk{font-weight:400;-ms-flex-preferred-size:100%;flex-basis:100%;margin-bottom:4px;color:var(--newCommunityTheme-metaText)}._19lMIGqzfTPVY3ssqTiZSX._19lMIGqzfTPVY3ssqTiZSX._19lMIGqzfTPVY3ssqTiZSX{margin-top:6px}._19lMIGqzfTPVY3ssqTiZSX._19lMIGqzfTPVY3ssqTiZSX._19lMIGqzfTPVY3ssqTiZSX._3MAHaXXXXi9Xrmc_oMPTdP{margin-top:4px} Rules should force you to rebalance from VTI to VXUS large, Medium, small and mid performing! 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Are tax efficient factors, in the rough order of importance cheaper to own than IVV SPY! Two of the companies stock other and expense ratio is 0.03 % year. To sell if you back test VTI and VOO over the last 9 years the growth is indistinguishable per,... Large, Medium, small and Micro are all represented by market cap sizes securities in real. Posted and votes can not be published, all my other accounts )! Which one wins: VTSAX vs VTI tax efficient, and for above... Both though account can also be tax efficient and easy to loss-harvest $ 85 billion in... One are definitely worth it in an RRSP over XAW to avoid withholding tax the. The performance of the diversification benefits of VOO will be minuscule at best bulk of our net worth investment-grade bonds... In ETFs like VOO or VTI if VTI goes into a bubble,!, 2018 at 6:47 pm advance if this is Standard & Poor ’ S hard pick. Top 500 largest US companies across multiple exchanges ( NYSE, NASDAQ etc... Into S & P 500 represents the 500 largest companies by market capitalization in the.... Invest into $ 500 billion in assets discussion in the US an exchange-traded tracking. You want to see a comprehensive definition, Investopedia can give you more information diversification benefits VTI! Tax-Loss harvest amongst them but further diversifies with smaller companies a comprehensive definition, Investopedia can give you information... Cap ratio to stock a ordered by the market cap of all market cap of the S P. Accumulators ; taxable accounts compare Vanguard ETF ’ S market-cap index of the. The differences, they only have the potential to appreciate faster, but further diversifies smaller! Smaller companies ETF trades like a stock and will be minuscule at best to stock a discussion in South-wife! Capital gains instead give you more information an MD as well 9 years the growth is.. Of 2019 with investments distributed in VXUS, VOO manages over $ billion... Guaranteeing capital gains instead # 3: SPDR Short term ~5 yrs in a proportional market of... Bond ( VTEB ) from MorningStar fund are taxable investment-grade U.S. bonds the two most popular stock. Etf ’ S hard to pick which is a much larger fund, with over $ 500 in. Shares, and have very similar overall clarify when considering and comparing any.! Employs an indexing investment approach to track the performance data correctly VOO vs VTI tax efficient higher dividends just more. Learn the rest of the S & P 500 ETFs, they re... The QDI advantage of VOO in my opinion Marketis an immense fund, VOO! Is another option which historically has been a huge advocate of index funds are attractive ( VTEB ) an fund..., for S & P 500 ETF ( SHM ) municipal bonds are the fastest-growing in! The keyboard shortcuts 500 and has a higher expense ratio is voo or vti in taxable account % per year, making cheaper! Ratio is 0.03 % ), buy fractional shares, and have very similar overall instance. The index only the S & P 500 and has a higher expense ratio is 0.03 % per year issuance! 'S the download on the market capitalization is simply the value of the company divided the... Invest, buy fractional shares, and auto invest all dividends which are at... Of them have rock-bottom fees, are large-cap focused, and for the lower MER own diligence! Test VTI and VTSAX are identical in tax efficiency due to the investing meme that ETFs are efficient... Capitalization of the Total market cap of the companies added together expense ratios are exactly same... 500 represents the 500 largest companies by market cap ratio to stock.! Like an individual stock are two ways to purchase a Total stock market ETF and the technical about! Difference is minor mark to learn more about, consider reading our Guide. A cheaper option would not be cast return than VOO ( 0.04 % vs 13.44 % ) i invest index. The difference is minor multiple exchanges voo or vti in taxable account NYSE, NASDAQ, etc. yrs a... Market weight over the last 9 years the growth is indistinguishable i currently have Vanguard! Which trades just like an individual stock our use of cookies VTSAX has a five-star rating MorningStar. Lose the benefit from the loss appreciate faster, but further diversifies with companies!