Exchange-traded funds or ETFs are quite similar to mutual funds as they are a type of pooled investment security. However, unlike mutual funds, ETFs can be purchased and sold on the stock exchange in the same manner that individual stocks can. ETFs are great for investors when it comes to diversification purposes as an ETF can contain a multitude of investment types, from stocks to commodities to bonds to more.
In addition, ETFs can hold stocks across various industries or even isolate themselves to one particular industry or sector. When it comes to investing in ETFs, the two most popular on the U.S. stock market are ITOT and VTI. Which ETF is the best investment option for you?
What Is VTI?
Launched in 2001, the stock ticker VTI represents the Vanguard Total Stock Market ETF.
VTI is an exchange-traded fund of The Vanguard Group, INC., which is the world’s second-largest provider of ETFs.
Founded in 1975, The Vanguard Group is a registered investment advisor based out of Malvern, Pennsylvania. The entire Vanguard Group holds around $7 trillion in global assets.
VTI Holdings
For an exchange-traded fund, VTI is highly diversified, with over 3,900 various stock holdings. VTI has over $260 billion in assets. As of January 31, 2022, the top ten VTI holdings include:
- Apple Inc. (NASDAQ: AAPL)
- Microsoft Corp. (NASDAQ: MSFT)
- Alphabet Inc. (NASDAQ: GOOGL)
- Amazon.com Inc. (NASDAQ: AMZN)
- Tesla Inc. (NASDAQ: TSLA)
- Meta Platforms Inc. (NASDAQ: FB)
- NVIDIA Corp. (NASDAQ: NVDA)
- Berkshire Hathaway Inc. (NASDAQ: BRK-B)
- Johnson & Johnson (NASDAQ: JNJ)
- UnitedHealth Group Inc. (NASDAQ: UNH)
These ten holdings make up around 25% of the total net assets of VTI. In addition, the various sectors of VTI holdings are currently broken down to include:
- Technology (25.54%)
- Financial Services (13.70%)
- Healthcare (13.10%)
- Consumer Cyclical (11.64%)
- Communication Services (9.20%)
- Industrials (8.87%)
- Consumer Defensive (6.02%)
- Real Estate (3.71%)
- Energy (3.34%)
- Utilities (2.49%)
- Basic Materials (2.39%)
VTI Stats
- VTI Expense Ratio: 0.03%
- VTI Volume: 4.61 M
- VTI P/E Ratio: 30.33
- VTI 52 Week High: $244.06
- VTI 52 Week Low: $194.11
What Is ITOT?
Launched in 2004, the stock ticker ITOT represents the iShares Core S&P Total U.S. Stock Market ETF. iShares is a collection of ETFs managed by BlackRock, Inc.
Founded in 1988, BlackRock is a multinational investment management corporation based out of New York City. BlackRock is the world’s largest asset manager with over $10 trillion in global assets.
ITOT Holdings
In comparison to VTI’s 3,900 various stock holdings, ITOT does not have quite as many holdings. However, ITOT is still an extremely diversified ETF with around 3,500 holdings.
Overall, ITOT has over $42 billion in assets.
As of January 31, 2022, the top ten ITOT holdings include:
- Apple Inc. (NASDAQ: AAPL)
- Microsoft Corp. (NASDAQ: MSFT)
- Amazon.com Inc. (NASDAQ: AMZN)
- Meta Platforms Inc. (NASDAQ: FB)
- Alphabet Inc. Class A (NASDAQ: GOOGL)
- Alphabet Inc. Class C (NASDAQ: GOOG)
- Tesla Inc. (NASDAQ: TSLA)
- Berkshire Hathaway Inc. (NASDAQ: BRK-B)
- NVIDIA Corp. (NASDAQ: NVDA)
- JPMorgan Chase & Co. (NASDAQ: JPM)
These ten holdings make up around 23% of the total net assets of ITOT. In addition, the various sectors of ITOT holdings are currently broken down to include:
- Technology (24.89%)
- Financial Services (14.15%)
- Healthcare (13.30%)
- Consumer Cyclical (11.53%)
- Industrials (8.83%)
- Communication Services (8.78%)
- Consumer Defensive (6.28%)
- Real Estate (3.65%)
- Energy (3.63%)
- Basic Materials (2.50%)
- Utilities (2.46%)
ITOT Stats
- ITOT Expense Ratio: 0.03%
- ITOT Volume: 3.66 M
- ITOT P/E Ratio: 29.95
- ITOT 52 Week High: $108.15
- ITOT 52 Week Low: $86.05
VTI vs ITOT: Which ETF Is Best?
So, which ETF reigns supreme in the VTI vs. ITOT matchup? While the two ETFs are quite similar, based on the numbers, it seems that VTI pulls a little ahead of ITOT in a straight across comparison.
When it comes to similarities, both VTI and ITOT have the same expense ratio of 0.03%. Both ETFs also have a very similar breakdown when it comes to their top 10 holdings and sector holding breakdowns. However, VTI edges ahead of ITOT through more diverse and expansive holdings overall.
VTI is also more exposed to small and mid-cap stocks, which has allowed the ETF to slightly outperform ITOT historically. So, when choosing between investing in VTI and ITOT, it appears the best ETF investment choice is VTI.
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