Vanguard Extended Market ETF: VOO vs. IVV

Introduction

Are you looking for a way to invest in the broad U.S. stock market? If so, you may be considering the Vanguard Extended Market ETF (VTI). This ETF tracks the performance of the CRSP US Extended Market Index, which includes all publicly traded companies in the United States that are not included in the S&P 500 Index.

VTI is a good option for investors who want to diversify their portfolios and reduce their exposure to large-cap stocks. It is also a good choice for investors who are looking for a long-term investment.

How VTI Works

VTI is a passively managed ETF, which means that it does not attempt to outperform the benchmark index. Instead, it simply tracks the performance of the index. This makes VTI a relatively low-cost investment, with an expense ratio of just 0.03%.

VTI is also a highly diversified ETF, with over 3,500 holdings. This diversification helps to reduce the risk of investing in any one company.

Performance of VTI

VTI has performed well over the long term. Since its inception in 2001, VTI has returned an average of 8.5% per year. This return is higher than the return of the S&P 500 Index, which has returned an average of 7.5% per year over the same period.

VTI has also outperformed the S&P 500 Index in terms of volatility. VTI has a standard deviation of 15%, compared to 17% for the S&P 500 Index. This means that VTI has experienced less price volatility than the S&P 500 Index.

Fees of VTI

VTI has an expense ratio of just 0.03%. This is one of the lowest expense ratios for any ETF. The low expense ratio means that more of your investment will be invested in the underlying stocks and less will be lost to fees.

Risks of VTI

VTI is subject to the same risks as any other investment in the stock market. These risks include:

• Market risk: The value of VTI can fluctuate with the overall stock market.
• Interest rate risk: The value of VTI can also fluctuate with interest rates. When interest rates rise, the value of VTI can fall.
• Inflation risk: The value of VTI can also be eroded by inflation over time.

Is VTI Right for Me?

VTI is a good investment for investors who:

• Are looking for a way to invest in the broad U.S. stock market.
• Want to diversify their portfolios.
• Are looking for a long-term investment.
• Are comfortable with the risks of investing in the stock market.

If you are not comfortable with the risks of investing in the stock market, you may want to consider a less risky investment, such as a bond fund or a money market account.

How to Buy VTI

VTI is available for purchase through most online brokers. You can also purchase VTI through a financial advisor.

Alternatives to VTI

There are a number of other ETFs that track the performance of the extended market. Some of the most popular alternatives to VTI include:

• Schwab U.S. Extended Market ETF (SCHX)
• iShares Core U.S. Extended Market ETF (IUSV)
• PowerShares Extended Market Low Beta ETF (EMLB)

These ETFs all have similar expense ratios and performance as VTI.

Conclusion

VTI is a good option for investors who are looking for a way to invest in the broad U.S. stock market. It is a well-diversified ETF with a low expense ratio. VTI has performed well over the long term and is a good choice for investors who are looking for a long-term investment.

Frequently Asked Questions

What is the difference between VTI and VOO?

VTI tracks the performance of the CRSP US Extended Market Index, which includes all publicly traded companies in the United States that are not included in the S&P 500 Index. VOO tracks the performance of the S&P 500 Index.

Which is better, VTI or VOO?

VTI is a better option for investors who want to diversify their portfolios and reduce their exposure to large-cap stocks. VOO is a better option for investors who want to invest in the S&P 500 Index.

What is the expense ratio of VTI?

The expense ratio of VTI is 0.03%.

Is VTI a good investment?

VTI is a good investment for investors who are looking for a way to invest in the broad U.S. stock market. It is a well-diversified ETF with a low expense ratio. VTI has performed well over the long term and is a good choice for investors who are looking for a long-term investment.

Additional Information

• Vanguard Extended Market ETF (VTI)
• Schwab U.S. Extended Market ETF (SCHX)
• iShares Core U.S. Extended Market ETF (IUSV)
• PowerShares Extended Market Low Beta ETF (EMLB)

Tables

Table 1: Performance of VTI

Table 2: Fees of VTI

Table 3: Risks of VTI

Table 4: Alternatives to VTI