The Vanguard Total Stock Market Index Fund ETF Shares (VTI) and the Vanguard Mid-Cap Index Fund ETF Shares (VO) are both among the Top 100 ETFs. VTI is a Vanguard Large Blend fund and VO is a Vanguard Mid-Cap Blend fund. So, what’s the difference between VTI and VO? And which fund is better?
The expense ratio of VTI is 0.01 percentage points lower than VO’s (0.03% vs. 0.04%). VTI also has a higher exposure to the technology sector and a lower standard deviation. Overall, VTI has provided higher returns than VO over the past ten years.
In this article, we’ll compare VTI vs. VO. We’ll look at risk metrics and annual returns, as well as at their industry exposure and holdings. Moreover, I’ll also discuss VTI’s and VO’s fund composition, performance, and portfolio growth and examine how these affect their overall returns.
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Summary
| VTI | VO | |
| Name | Vanguard Total Stock Market Index Fund ETF Shares | Vanguard Mid-Cap Index Fund ETF Shares |
| Category | Large Blend | Mid-Cap Blend |
| Issuer | Vanguard | Vanguard |
| AUM | 1.26T | 154.08B |
| Avg. Return | 14.70% | 14.34% |
| Div. Yield | 1.26% | 1.23% |
| Expense Ratio | 0.03% | 0.04% |
The Vanguard Total Stock Market Index Fund ETF Shares (VTI) is a Large Blend fund that is issued by Vanguard. It currently has 1.26T total assets under management and has yielded an average annual return of 14.70% over the past 10 years. The fund has a dividend yield of 1.26% with an expense ratio of 0.03%.
The Vanguard Mid-Cap Index Fund ETF Shares (VO) is a Mid-Cap Blend fund that is issued by Vanguard. It currently has 154.08B total assets under management and has yielded an average annual return of 14.34% over the past 10 years. The fund has a dividend yield of 1.23% with an expense ratio of 0.04%.
VTI’s dividend yield is 0.03% higher than that of VO (1.26% vs. 1.23%). Also, VTI yielded on average 0.36% more per year over the past decade (14.70% vs. 14.34%). The expense ratio of VTI is 0.01 percentage points lower than VO’s (0.03% vs. 0.04%).
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Fund Composition
Industry Exposure
| VTI | VO | |
| Technology | 24.1% | 22.01% |
| Industrials | 9.39% | 11.92% |
| Energy | 2.77% | 3.82% |
| Communication Services | 10.4% | 5.61% |
| Utilities | 2.29% | 5.12% |
| Healthcare | 13.64% | 13.03% |
| Consumer Defensive | 5.77% | 3.25% |
| Real Estate | 3.59% | 8.67% |
| Financial Services | 13.77% | 11.08% |
| Consumer Cyclical | 11.83% | 12.12% |
| Basic Materials | 2.44% | 3.36% |
The Vanguard Total Stock Market Index Fund ETF Shares (VTI) has the most exposure to the Technology sector at 24.1%. This is followed by Financial Services and Healthcare at 13.77% and 13.64% respectively. Basic Materials (2.44%), Energy (2.77%), and Real Estate (3.59%) only make up 8.80% of the fund’s total assets.
VTI’s mid-section with moderate exposure is comprised of Consumer Defensive, Industrials, Communication Services, Consumer Cyclical, and Healthcare stocks at 5.77%, 9.39%, 10.4%, 11.83%, and 13.64%.
The Vanguard Mid-Cap Index Fund ETF Shares (VO) has the most exposure to the Technology sector at 22.01%. This is followed by Healthcare and Consumer Cyclical at 13.03% and 12.12% respectively. Basic Materials (3.36%), Energy (3.82%), and Utilities (5.12%) only make up 12.30% of the fund’s total assets.
VO’s mid-section with moderate exposure is comprised of Communication Services, Real Estate, Financial Services, Industrials, and Consumer Cyclical stocks at 5.61%, 8.67%, 11.08%, 11.92%, and 12.12%.
VTI is 2.09% more exposed to the Technology sector than VO (24.1% vs 22.01%). VTI’s exposure to Financial Services and Healthcare stocks is 2.69% higher and 0.61% higher respectively (13.77% vs. 11.08% and 13.64% vs. 13.03%). In total, Basic Materials, Energy, and Real Estate also make up 7.05% less of the fund’s holdings compared to VO (8.80% vs. 15.85%).
Holdings
| VTI Holdings | Weight |
| Apple Inc | 4.9% |
| Microsoft Corp | 4.6% |
| Amazon.com Inc | 3.33% |
| Facebook Inc Class A | 1.88% |
| Alphabet Inc Class A | 1.66% |
| Alphabet Inc Class C | 1.56% |
| Tesla Inc | 1.18% |
| Berkshire Hathaway Inc Class B | 1.09% |
| NVIDIA Corp | 1.07% |
| JPMorgan Chase & Co | 1.06% |
VTI’s Top Holdings are Apple Inc, Microsoft Corp, Amazon.com Inc, Facebook Inc Class A, and Alphabet Inc Class A at 4.9%, 4.6%, 3.33%, 1.88%, and 1.66%.
Alphabet Inc Class C (1.56%), Tesla Inc (1.18%), and Berkshire Hathaway Inc Class B (1.09%) have a slightly smaller but still significant weight. NVIDIA Corp and JPMorgan Chase & Co are also represented in the VTI’s holdings at 1.07% and 1.06%.
| VO Holdings | Weight |
| IDEXX Laboratories Inc | 0.78% |
| DocuSign Inc | 0.75% |
| Marvell Technology Inc | 0.68% |
| IQVIA Holdings Inc | 0.68% |
| Chipotle Mexican Grill Inc | 0.63% |
| Veeva Systems Inc Class A | 0.62% |
| Digital Realty Trust Inc | 0.62% |
| Centene Corp | 0.62% |
| Aptiv PLC | 0.62% |
| Carrier Global Corp Ordinary Shares | 0.61% |
VO’s Top Holdings are IDEXX Laboratories Inc, DocuSign Inc, Marvell Technology Inc, IQVIA Holdings Inc, and Chipotle Mexican Grill Inc at 0.78%, 0.75%, 0.68%, 0.68%, and 0.63%.
Veeva Systems Inc Class A (0.62%), Digital Realty Trust Inc (0.62%), and Centene Corp (0.62%) have a slightly smaller but still significant weight. Aptiv PLC and Carrier Global Corp Ordinary Shares are also represented in the VO’s holdings at 0.62% and 0.61%.
Performance
Annual Returns
| Year | VTI | VO |
| 2020 | 20.95% | 18.22% |
| 2019 | 30.8% | 31.04% |
| 2018 | -5.13% | -9.21% |
| 2017 | 21.16% | 19.25% |
| 2016 | 12.68% | 11.23% |
| 2015 | 0.4% | -1.34% |
| 2014 | 12.56% | 13.76% |
| 2013 | 33.51% | 35.15% |
| 2012 | 16.41% | 15.98% |
| 2011 | 1.06% | -1.96% |
| 2010 | 17.26% | 25.57% |
VTI had its best year in 2013 with an annual return of 33.51%. VTI’s worst year over the past decade yielded -5.13% and occurred in 2018. In most years the Vanguard Total Stock Market Index Fund ETF Shares provided moderate returns such as in 2016, 2012, and 2010 where annual returns amounted to 12.68%, 16.41%, and 17.26% respectively.
The year 2013 was the strongest year for VO, returning 35.15% on an annual basis. The poorest year for VO in the last ten years was 2018, with a yield of -9.21%. Most years the Vanguard Mid-Cap Index Fund ETF Shares has given investors modest returns, such as in 2014, 2012, and 2020, when gains were 13.76%, 15.98%, and 18.22% respectively.
Portfolio Growth
| Fund | Initial Balance | Final Balance | CAGR |
| VTI | $10,000 | $42,648 | 14.70% |
| VO | $10,000 | $40,404 | 14.34% |
A $10,000 investment in VTI would have resulted in a final balance of $42,648. This is a profit of $32,648 over 11 years and amounts to a compound annual growth rate (CAGR) of 14.70%.
With a $10,000 investment in VO, the end total would have been $40,404. This equates to a $30,404 profit over 11 years and a compound annual growth rate (CAGR) of 14.34%.
VTI’s CAGR is 0.36 percentage points higher than that of VO and as a result, would have yielded $2,244 more on a $10,000 investment. Thus, VTI outperformed VO by 0.36% annually.
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