Choosing Between ITOT and VTI: A Deep Dive Into Market ETF Comparison on Fees, Holdings, and Performance

The Cost Factor: Where They Stand

When it comes to affordability, iShares Core S&P Total US Stock Market ETF (ITOT) and Vanguard Total Stock Market ETF (VTI) appear virtually identical on the surface. Both charge an ultra-low 0.03% expense ratio annually, making them equally attractive for fee-conscious investors looking to compare market options without breaking the bank.

However, size tells a different story. VTI manages a substantial $567 billion in assets under management (AUM), dwarfing ITOT’s $80 billion. This disparity has real implications for how these funds operate and trade in the real world, even if the headline fees are the same.

Holdings and Diversification: A Numbers Game

The breadth of holdings reveals one of the clearest distinctions between these two total stock market vehicles. VTI tracks the CRSP US Total Market Index and encompasses 3,527 individual stocks, casting an exceptionally wide net across large-cap, mid-cap, and small-cap companies. ITOT holds 2,498 securities—still comprehensive, but notably fewer.

For investors who prize maximum exposure across every market segment, this 1,000-stock differential isn’t trivial. VTI’s expanded universe means you’re capturing more nuance in small and mid-cap territory, though both funds deliver exposure to growth and value styles throughout the market.

Sector Composition and Top Holdings

Despite their different security counts, sector weightings look remarkably similar. Technology dominates both portfolios at roughly 34-35%, followed by financial services around 13% and consumer cyclicals in the 10-11% range. Apple, Nvidia, and Microsoft occupy the top positions in each fund’s portfolio, underscoring how closely they track the broader equity market.

This alignment suggests that the marginal differences in holdings don’t dramatically shift sector exposure—a reassuring sign for investors worried about hidden tilts.

Performance and Risk: Nearly Identical Twins

When you compare market returns between ITOT and VTI, the numbers are strikingly similar. Over the trailing 12 months (as of early January 2025), ITOT returned 14.69% while VTI delivered 14.76%—a difference so small it falls within rounding error. Five-year growth paints an equally uniform picture: $1,000 invested grew to roughly $1,728-$1,730, with max drawdowns nearly matching at -25.35% and -25.36%.

Both funds carry a beta of 1.04 over five years, meaning they experience similar volatility relative to the broader market. Dividend yields are also aligned, with ITOT at 1.09% and VTI marginally ahead at 1.11%.

Liquidity and Practical Trading Implications

VTI’s significantly larger AUM translates to a tangible advantage: superior liquidity. While this may seem academic, it matters for investors executing large trades. With deeper order books and tighter bid-ask spreads, VTI accommodates bigger position sizes without meaningfully moving the ETF’s price. ITOT, by contrast, might experience slightly wider spreads on larger orders—a consideration for institutional or high-net-worth investors.

For the average retail investor buying modest shares, this distinction rarely impacts real-world outcomes.

The Practical Decision Framework

Selecting between ITOT and VTI ultimately hinges on a handful of factors. If you prioritize maximum diversification across every corner of the U.S. equity market, VTI edges ahead with its superior stock count and established track record spanning over two decades. The fund’s massive scale also ensures you can execute sizable trades without friction.

ITOT remains a compelling choice for investors who view the slight reduction in holdings as an acceptable trade-off for lower complexity. Since both funds charge identical fees, expense ratios won’t sway your decision.

In performance, risk, and dividend income, they’re functionally equivalent. Neither fund employs leverage, currency hedging, or ESG screens—both maintain refreshingly straightforward, market-tracking strategies.

For most investors, the choice comes down to personal preference rather than material financial differences. Both represent excellent entry points into diversified U.S. equity exposure at rock-bottom costs.

Quick Reference Glossary

ETF: Exchange-traded fund holding a basket of securities that trades like a stock on exchanges.

Expense Ratio: Annual operating costs as a percentage of invested assets—your direct cost of fund ownership.

Diversification: Spreading investments across numerous holdings to reduce concentration risk.

Dividend Yield: Annual distributions paid to shareholders expressed as a percentage of current share price.

Beta: Volatility measure comparing an investment’s price movements to the S&P 500 benchmark.

AUM: Total market value of all assets managed by a fund or investment manager.

Max Drawdown: Largest peak-to-valley decline in fund value during a specified timeframe, representing worst-case historical losses.

Sector Allocation: Distribution of fund holdings across different industries and economic sectors.