Side-by-Side Comparison
| Metric | VTI | SPY |
|---|---|---|
| Type | ETF | ETF |
| Expense Ratio | 3.00% | 9.45% |
| Holdings | 3,645 | 503 |
| Dividend Yield | 1.28% | 1.22% |
| Min Investment | None | None |
| Inception | 2001-05-24 | 1993-01-22 |
| Index Tracked | CRSP US Total Market Index | S&P 500 Index |
| AUM | $427B | $560B |
Fund data last updated: 2025-01-02. Expense ratios, holdings, and yields may change. Always verify with official sources.
Key Differences
- •VTI has much lower expense ratio (0.03% vs 0.0945%)
- •VTI holds ~3,600 stocks; SPY holds ~500
- •SPY is the oldest and most traded ETF (more liquidity)
- •SPY is structured as a unit investment trust with some limitations
Which Should You Choose?
Taxable Brokerage Account
VTI is clearly better for long-term investors: lower cost, more diversification. SPY's only advantage is liquidity (irrelevant for buy-and-hold).
IRA (Traditional or Roth)
VTI. The 0.06% expense ratio difference compounds significantly over decades.
401(k)
Use VTI or a total market equivalent. If only SPY is available, it's still fine but not optimal.
JL Collins' Recommendation
JL Collins recommends total market (VTI) over S&P 500 (SPY). VTI includes small and mid-caps, owns more companies, and has a lower expense ratio. There's no reason to choose SPY over VTI or VOO.
Frequently Asked Questions
Why is SPY more expensive than VTI?
SPY was the first ETF (1993) and is structured as a unit investment trust with less flexibility to minimize costs. VOO (Vanguard's S&P 500 ETF) has a 0.03% ratio—same as VTI. SPY persists due to brand recognition and trading volume.
Is SPY good for long-term investing?
SPY is fine, but not optimal. For long-term buy-and-hold investors, VTI or VOO offer better value. SPY's advantages (liquidity, options trading) benefit active traders, not passive investors.
Why do people still buy SPY?
SPY is the most liquid ETF in the world, making it ideal for active traders and options strategies. For buy-and-hold investors, this liquidity is irrelevant—VTI or VOO are better choices.
What's the performance difference between VTI and SPY?
Performance is nearly identical, with correlation above 0.99. The main difference is the 0.06% annual expense ratio gap, which compounds to meaningful dollars over decades.
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