The Vanguard Total Stock Market Index Fund ETF Shares (VTI) and the Vanguard Growth Index Fund ETF Shares (VUG) are both among the Top 100 ETFs. VTI is a Vanguard Large Blend fund and VUG is a Vanguard Large Growth fund. So, what’s the difference between VTI and VUG? And which fund is better?
The expense ratio of VTI is 0.01 percentage points lower than VUG’s (0.03% vs. 0.04%). VTI also has a lower exposure to the technology sector and a lower standard deviation. Overall, VTI has provided lower returns than VUG over the past ten years.
In this article, we’ll compare VTI vs. VUG. We’ll look at holdings and industry exposure, as well as at their performance and fund composition. Moreover, I’ll also discuss VTI’s and VUG’s portfolio growth, risk metrics, and annual returns and examine how these affect their overall returns.
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Summary
| VTI | VUG | |
| Name | Vanguard Total Stock Market Index Fund ETF Shares | Vanguard Growth Index Fund ETF Shares |
| Category | Large Blend | Large Growth |
| Issuer | Vanguard | Vanguard |
| AUM | 1.26T | 165.53B |
| Avg. Return | 14.70% | 17.58% |
| Div. Yield | 1.26% | 0.57% |
| 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 Growth Index Fund ETF Shares (VUG) is a Large Growth fund that is issued by Vanguard. It currently has 165.53B total assets under management and has yielded an average annual return of 17.58% over the past 10 years. The fund has a dividend yield of 0.57% with an expense ratio of 0.04%.
VTI’s dividend yield is 0.69% higher than that of VUG (1.26% vs. 0.57%). Also, VTI yielded on average 2.88% less per year over the past decade (14.70% vs. 17.58%). The expense ratio of VTI is 0.01 percentage points lower than VUG’s (0.03% vs. 0.04%).
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Fund Composition
Industry Exposure
| VTI | VUG | |
| Technology | 24.1% | 39.05% |
| Industrials | 9.39% | 5.13% |
| Energy | 2.77% | 0.32% |
| Communication Services | 10.4% | 16.49% |
| Utilities | 2.29% | 0.0% |
| Healthcare | 13.64% | 8.09% |
| Consumer Defensive | 5.77% | 2.41% |
| Real Estate | 3.59% | 2.46% |
| Financial Services | 13.77% | 6.75% |
| Consumer Cyclical | 11.83% | 17.78% |
| Basic Materials | 2.44% | 1.52% |
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 Growth Index Fund ETF Shares (VUG) has the most exposure to the Technology sector at 39.05%. This is followed by Consumer Cyclical and Communication Services at 17.78% and 16.49% respectively. Energy (0.32%), Basic Materials (1.52%), and Consumer Defensive (2.41%) only make up 4.25% of the fund’s total assets.
VUG’s mid-section with moderate exposure is comprised of Real Estate, Industrials, Financial Services, Healthcare, and Communication Services stocks at 2.46%, 5.13%, 6.75%, 8.09%, and 16.49%.
VTI is 14.95% less exposed to the Technology sector than VUG (24.1% vs 39.05%). VTI’s exposure to Financial Services and Healthcare stocks is 7.02% higher and 5.55% higher respectively (13.77% vs. 6.75% and 13.64% vs. 8.09%). In total, Basic Materials, Energy, and Real Estate also make up 4.50% more of the fund’s holdings compared to VUG (8.80% vs. 4.30%).
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%.
| VUG Holdings | Weight |
| Apple Inc | 10.13% |
| Microsoft Corp | 9.52% |
| Amazon.com Inc | 6.88% |
| Facebook Inc Class A | 3.89% |
| Alphabet Inc Class A | 3.43% |
| Alphabet Inc Class C | 3.22% |
| Tesla Inc | 2.44% |
| NVIDIA Corp | 2.21% |
| Visa Inc Class A | 1.78% |
| PayPal Holdings Inc | 1.6% |
VUG’s Top Holdings are Apple Inc, Microsoft Corp, Amazon.com Inc, Facebook Inc Class A, and Alphabet Inc Class A at 10.13%, 9.52%, 6.88%, 3.89%, and 3.43%.
Alphabet Inc Class C (3.22%), Tesla Inc (2.44%), and NVIDIA Corp (2.21%) have a slightly smaller but still significant weight. Visa Inc Class A and PayPal Holdings Inc are also represented in the VUG’s holdings at 1.78% and 1.6%.
Performance
Annual Returns
| Year | VTI | VUG |
| 2020 | 20.95% | 40.16% |
| 2019 | 30.8% | 37.26% |
| 2018 | -5.13% | -3.32% |
| 2017 | 21.16% | 27.8% |
| 2016 | 12.68% | 6.13% |
| 2015 | 0.4% | 3.32% |
| 2014 | 12.56% | 13.62% |
| 2013 | 33.51% | 32.38% |
| 2012 | 16.41% | 17.03% |
| 2011 | 1.06% | 1.87% |
| 2010 | 17.26% | 17.11% |
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 2020 was the strongest year for VUG, returning 40.16% on an annual basis. The poorest year for VUG in the last ten years was 2018, with a yield of -3.32%. Most years the Vanguard Growth Index Fund ETF Shares has given investors modest returns, such as in 2014, 2012, and 2010, when gains were 13.62%, 17.03%, and 17.11% respectively.
Portfolio Growth
| Fund | Initial Balance | Final Balance | CAGR |
| VTI | $10,000 | $42,648 | 14.70% |
| VUG | $10,000 | $54,735 | 17.58% |
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 VUG, the end total would have been $54,735. This equates to a $44,735 profit over 11 years and a compound annual growth rate (CAGR) of 17.58%.
VTI’s CAGR is 2.88 percentage points lower than that of VUG and as a result, would have yielded $12,087 less on a $10,000 investment. Thus, VTI performed worse than VUG by 2.88% annually.
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