The pursuit of comprehensive market exposure, it seems, has become the new aristocracy of portfolio construction. Everyone desires a kingdom encompassing the entirety of the investable universe, yet few truly appreciate the exquisite boredom of owning absolutely everything. Total market funds, naturally, are the instruments of this ambition, offering diversification with the same enthusiasm a duchess reserves for another season’s gowns. To find one that isn’t excessively dear is, admittedly, a small triumph.
We are presented with two contenders: the Vanguard Total Stock Market ETF (VTI 0.01%) and the iShares Core S&P Total U.S. Stock Market ETF (ITOT 0.06%). On superficial inspection, they appear identical—a distressing lack of originality, wouldn’t you agree? But as any seasoned observer of human nature—or, indeed, financial markets—knows, the devil resides not in the broad strokes, but in the meticulous details.
Total Stock Market ETFs: A Study in Subtle Differences
The Vanguard ETF, with a flourish of ambition, tracks the CRSP US Total Market Index, aiming to capture the entirety of the American equity landscape, from the titans of industry to the most obscure of ventures. The iShares fund, less ostentatious, follows the S&P Total Market Index, a composite of the well-regarded S&P 500 and the more modest S&P Completion Index. Translation: both endeavor to own every share that can be legally acquired. The difference, it transpires, is one of degree, not of kind.
Vanguard boasts approximately 3,500 holdings, while iShares settles for a mere 2,500. A significant disparity? One might think so, until one realizes that the extra thousand consist largely of micro-cap stocks—the financial equivalent of charming, but ultimately inconsequential, acquaintances. In a market-capitalization-weighted strategy, these diminutive holdings contribute a negligible percentage – perhaps one or two – to the overall portfolio. To expend energy on such trifles is, frankly, rather vulgar.
The majority of both portfolios are, unsurprisingly, composed of the same familiar names. Consequently, their historical performance is, shall we say, remarkably…predictable. One might almost suspect a conspiracy of mediocrity.
Both ETFs carry an expense ratio of 0.03%, are readily traded, and possess ample liquidity. Therefore, neither offers a compelling cost advantage. To search for savings at such a microscopic level is to mistake prudence for parsimony.
Which ETF Deserves Your Investment?
This, my dear reader, is a contest so close, it borders on the absurd. A true stalemate of the financial world. The only material distinction lies in Vanguard’s inclusion of those extra thousand micro-caps. But given their trivial impact, it’s akin to boasting about owning a slightly larger collection of dust.
I, however, shall declare a preference for the Vanguard Total Stock Market ETF, purely on the grounds of completeness. Why settle for merely encompassing the vast majority of the market when you can, with a touch of extravagance, own absolutely everything? It’s a matter of principle, you see. Though, in truth, one is unlikely to notice any discernible difference in performance or fees, regardless of one’s choice. The market, after all, has a way of humbling even the most meticulous of investors.
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2026-01-18 22:02