ITOT Vs. VTI: Since 2015 Very Similar, But VTI Still Ahead
January 13, 2023
Summary
- The iShares Core S&P Total U.S. Stock Market ETF (ITOT) and Vanguard Total Stock Market ETF (VTI) are among the largest ETFs to invest passively in the US equity market.
- For the longest common period since 2004, ITOT underperformed VTI by about 20%-points or slightly more than 20 basis points per year.
- However, just looking at this long-term performance chart is somewhat misleading here. Because of several changes, the two funds tracked 5 different indices over the last 15 years.
- Starting in December 2015, ITOT switched from the S&P 1500 to the S&P Total Market Index which made the two ETFs mostly comparable. The performance gap to VTI also narrowed.
- The analysis shows that even passive investors should not only compare ETFs by their historical performance but also pay close attention to the underlying indices, and even more important, index/benchmark changes.
- SA #18: RPV – ‘Pure Value’ Is Indeed More Value Than ‘Value’
- SA #17: IUSV – Transparent Value With Modest Active Risk
- SA #16: IWD – Low Growth Is Not Necessarily Value – Also For Large Caps
- SA #15: VLUE – Transparent Value With Little Industry Bets
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