ETFs & Existential Dread

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My aunt Mildred, God bless her, once tried to explain ETFs to me. It involved a lot of hand-waving, a comparison to Tupperware, and a vague threat about the impending collapse of society. I mostly nodded, pretending to understand. Honestly, the whole thing feels… precarious. Like trying to build a house of cards during an earthquake. I’ve been poking around a couple lately, the Vanguard Value ETF (VTV) and the SPDR Portfolio S&P 1500 (SPTM), and I’m starting to think Mildred might have a point.

VTV, apparently, is for people who like things…solid. Established companies. The kind that probably have wood paneling and a strict dress code. It focuses on those large-cap value stocks, which, as far as I can tell, are companies that aren’t necessarily growing, but are stubbornly refusing to disappear. It’s a comforting thought, actually. Like owning a really heavy, reliable armchair. The expense ratio is a perfectly reasonable 0.04%, and it throws off a dividend yield of 2.05%. My accountant, a man who communicates almost exclusively in spreadsheets, seems pleased.

Then there’s SPTM. This one’s a bit more… rambunctious. It tries to mirror the entire U.S. equity market, which feels like an impossible task. It holds 1,510 stocks, spanning everything from tech giants to companies I’ve never heard of. It’s a little like opening a box of assorted chocolates – you’re bound to get a few you don’t like, but there’s a chance you’ll stumble upon something unexpectedly delightful. The expense ratio is a hair lower at 0.03%, but the dividend yield is a modest 1.13%. It’s like the difference between a polite handshake and a firm, enthusiastic grip.

Metric VTV SPTM
Issuer Vanguard SPDR
Expense ratio 0.04% 0.03%
1-yr return (as of Jan. 25, 2026) 11.48% 12.91%
Dividend yield 2.05% 1.13%
AUM $218 billion $12 billion
Beta (5Y monthly) 0.78 1.02

The numbers, of course, are just numbers. What really struck me was the sheer volume of money involved. $218 billion in VTV? That’s enough to make you feel deeply inadequate. SPTM, with its comparatively modest $12 billion, feels almost…quaint. Like a charming little bookstore struggling to compete with Amazon.

Looking at the holdings, it’s the usual suspects. Nvidia, Apple, Microsoft dominating SPTM. VTV leans towards JPMorgan Chase, Berkshire Hathaway, and Exxon Mobil. It’s a reminder that, despite all the talk of innovation, the world still runs on banks, insurance companies, and fossil fuels. It’s a little depressing, frankly.

Over the past five years, SPTM has outperformed VTV, delivering a slightly higher return. But VTV has been less volatile, with a lower beta and a milder max drawdown. It’s the classic trade-off: risk versus reward. I’m starting to think the best approach is to just close my eyes and pick one. Or maybe invest in something completely irrational, like vintage Pez dispensers. At least that would be interesting.

Ultimately, both ETFs seem perfectly reasonable. If you’re looking for stability and a steady income stream, VTV might be the way to go. If you’re willing to take on a little more risk in exchange for potentially higher returns, SPTM could be a better fit. Or, you could just follow my aunt Mildred’s advice and hoard canned goods. It’s a surprisingly effective strategy, apparently.

For more guidance on ETF investing, check out the full guide at this link. Though, honestly, I suspect it will only add to the confusion.

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2026-01-26 01:02