When considering low-cost U.S. equity exchange-traded funds (ETFs), the Vanguard Total Stock Market ETF (VTI) and the State Street SPDR Portfolio S&P 1500 Composite Stock Market ETF (SPTM) emerge as popular options. Each fund offers distinct characteristics that appeal to long-term investors.
Key Features of VTI and SPTM
Both VTI and SPTM are designed to provide comprehensive exposure to the U.S. stock market, making them solid choices for those seeking investment simplicity. Here’s a comparison of their major features:
| Metric | SPTM | VTI |
|---|---|---|
| Issuer | SPDR | Vanguard |
| Expense Ratio | 0.03% | 0.03% |
| 1-Year Return (as of January 1, 2026) | 15.50% | 15.69% |
| Dividend Yield | 1.13% | 1.11% |
| Assets Under Management (AUM) | $12 billion | $567 billion |
| Beta (5-Year Monthly) | 1.01 | 1.04 |
Performance Analysis
Evaluating the performance and risk involved with each ETF is crucial for investors. A comparison of growth based on a $1,000 investment reveals the following:
| Metric | SPTM | VTI |
|---|---|---|
| Growth Over 5 Years | $1,790 | $1,723 |
| Max Drawdown (5-Year) | -24.15% | -25.36% |
Portfolio Composition
The portfolio composition significantly affects each ETF’s performance. VTI represents a broader selection:
- VTI: Includes 3,527 stocks with major sector allocations in technology (35%), financial services, and consumer cyclicals.
- SPTM: Covers around 1,511 holdings, targeting 90% of the U.S. equity universe with 34% in technology among similar sector allocations.
Top Holdings
Both ETFs share significant overlap in their top holdings, primarily featuring:
- Apple
- Nvidia
- Microsoft
These companies together account for about 19% of both funds’ assets.
Investment Considerations
Choosing between VTI and SPTM can be challenging. Both ETFs have similar expense ratios and dividend yields, which means investors can expect comparable income and fees. However, there are vital distinctions:
- Assets Under Management: VTI’s greater AUM ($567 billion compared to SPTM’s $12 billion) offers enhanced liquidity.
- Number of Holdings: VTI aims to capture a broader spectrum of the market with approximately 2,000 more stocks.
While higher liquidity may not be a primary concern for long-term investors, it becomes relevant when considering trade execution of larger amounts.
Conclusion
Both VTI and SPTM provide extensive exposure to U.S. equities. Investors looking for diversity may lean toward VTI due to its larger portfolio. However, with similar risk profiles and costs, both funds remain excellent choices for simplified portfolio management.
