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VTI tends to perform worse than VOO, particularly in tough market conditions, which makes VOO a better option for long-term investors looking for higher returns and less risk. VOO's larger investment in the top seven tech companies offers more growth opportunities than VTI's wider market focus. Past performance indicates that VOO has regularly outperformed VTI, strengthening my choice for S&P 500 Index funds over total market funds.
This year has been remarkable for the markets, with the S&P 500 increasing by about 27%. Additionally, many growth stocks are currently trading close to or at their highest levels.
The Vanguard Total Stock Market Index Fund ETF provides wide exposure to the US market, but it is heavily weighted towards the top seven stocks, which make up almost 20% of the fund. Because of this concentration, VTI's performance is very similar to that of the S&P 500, which limits its ability to diversify. To reduce risk, you might want to include international and small-cap stocks by investing in global indices or specific ETFs that focus on stocks outside the US and large-cap companies.
VTI is an all-inclusive ETF that includes various parts of the US market and has a low cost. Analysts have given VTI's main stocks (Apple, Nvidia, Microsoft) more Hold ratings and fewer Strong Buy ratings. According to FactSet's Q3 earnings report, there have been fewer positive surprises and more negative earnings forecasts, while P/E ratios are still high compared to the past.
These various exchange-traded funds give you the advantage of time.
The Vanguard Total Stock Market ETF (VTI) is one of the leading exchange-traded funds globally, managing over $1.7 trillion in assets.
These three Vanguard ETFs are worth looking into for long-term investment.
Historical information indicates that stock markets tend to perform well during election months and often rise after the Federal Reserve lowers interest rates during economic growth. While bonds also perform well during rate cuts, they usually lag behind stocks unless there is a recession. I believe the Vanguard Total Stock Market ETF is a good investment right now.
There are various kinds of investors. Some like to actively manage their investments by selecting specific stocks, aiming to outperform the market and achieve higher returns in the long run.
Research indicates that a widely diversified investment strategy in America hasn't been the most aggressive approach. Currently, the valuations of large, mid, and small cap companies are higher than usual. As a result, while the VTI ETF can reduce certain risks, it won't protect against overall market risk, so a balanced allocation between American and global assets is recommended for a better risk-return balance.
FAQ
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