VTI vs. VTSAX: How Different Are These Index Funds?

The Vanguard Total Stock Market ETF (VTI) and the Vanguard Total Stock Market Index Fund (VTSAX) are commonly confused for each other because they largely reflect similar underlying investment holdings.

What is VTI?

The Vanguard Total Stock Market ETF (VTI) is an extremely well-diversified, market capitalization-weighted index that measures the whole investible United States’ equity market and was created in 2001.

What is VTSAX?

The Vanguard Total Stock Market Index Fund (VTSAX) is a large-blend mutual fund centered around the U.S. market. VTSAX also tracks the CRSP U.S. Total Market Index.

Why Do Investors Choose VTI and VTSAX?

While it may seem advantageous to start investing money in individual stocks on your own, there are benefits to investing in index funds through ETFs and mutual funds. Because VTI and VTSAX (and similar investments) come with built-in diversification, they involve less risk than individual stocks and bonds.

What are the Similarities Between VTI and VTSAX?

1. Very similar expense ratio with VTI at 0.03% and VTSAX at 0.04%. 2. Extremely similar returns over equivalent periods of time. 3. Further, the overall performance of the two is roughly the same. 4. These income-generating investments have nearly identical yields: 1.81% for VTI and 1.80% for VTSAX (as of 5/31/2020).

What is the Difference Between VTI and VTSAX?

→ ETF vs. Mutual Fund

The clearest distinction between VTI and VTSAX is that VTI is an ETF while VTSAX is a mutual fund. ETFs trade like stocks do with real-time pricing while the stock market is open.

→ Automated Investing

Another factor to consider is that sometimes with mutual funds, enrollment in automated investing can be easier because mutual funds do not have a set price level for additional investment. 

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