VTI vs VTWO
Vanguard Total Stock Market ETF vs Vanguard Russell 2000 ETF
Quick Verdict
VTI has a lower expense ratio. VTWO delivered stronger 1-year returns. VTI offers more diversification with 2783 holdings.
Side-by-Side Comparison
| Metric | VTI | VTWO | Winner |
|---|---|---|---|
| Expense Ratio | 0.03% | 0.06% | |
| AUM | $663.5B | $17.9B | |
| Dividend Yield | 1.07% | 1.39% | |
| Holdings | 3,543 | 1,970 | |
| YTD Return | +14.16% | +21.22% | |
| 1Y Return | +23.62% | +37.85% | |
| 3Y Return (annualized) | +21.43% | +17.82% | |
| 5Y Return (annualized) | +12.33% | +7.66% | |
| Volatility (annualized) | 15.3% | 19.1% | |
| Max Drawdown | -56.6% | -42.4% | |
| Fund Family | Vanguard (US) | Vanguard (US) | |
| Category | Equity | Equity | |
| Inception | May 24, 2001 | Sep 20, 2010 |
VTI vs VTWO Performance
Vanguard Total Stock Market ETF (VTI) is a ETF from Vanguard (US) and Vanguard Russell 2000 ETF (VTWO) is a ETF from Vanguard (US). Over the past year VTI returned +23.62% while VTWO returned +37.85%. Year to date, VTI is up 14.16% versus a gain of 21.22% for VTWO.
Over three years, VTI compounded at +21.43% per year against +17.82% for VTWO; over five years the annualized figures are +12.33% and +7.66% respectively. Across the full 16-year window we track, VTWO has the edge at +10.73% annualized vs +8.14%. Past performance does not guarantee future results.
Risk: Volatility and Drawdowns
VTWO has been the more volatile fund, with annualized monthly volatility of 19.1% compared with 15.3% for VTI. Lower volatility generally means a smoother ride, though it often comes with lower long-run returns.
The deepest peak-to-trough decline in our data was -56.6% for VTI and -42.4% for VTWO. Drawdown depth is worth weighing if you expect to sell during market stress rather than ride it out.
The two funds' monthly returns correlate at 0.90. They move almost in lockstep, so holding both mostly duplicates the same exposure.
Fees and Cost Over Time
VTI charges 0.03% per year while VTWO charges 0.06%. On a $10,000 position that is $3 vs $6 annually, a gap of $3 per year that compounds over a long holding period. On income, VTI currently yields 1.07% against 1.39% for VTWO.
Holdings Overlap
VTI and VTWO share 1405 holdings out of 3321 unique holdings combined, representing a 1.1% weight overlap.
Moderate overlap means holding both could provide meaningful diversification benefits.
Frequently Asked Questions
Which is cheaper, VTI or VTWO?
VTI has an expense ratio of 0.03% while VTWO charges 0.06%. VTI is the cheaper option. On a $10,000 investment, that is $3 per year of difference.
Which performed better, VTI or VTWO?
Over the past year VTI returned +23.62% vs +37.85% for VTWO, so VTWO leads on 1-year performance. Over the longest common window we track (16 years), VTI annualized +8.14% vs +10.73% for VTWO. Past performance does not guarantee future results.
Which is riskier, VTI or VTWO?
VTWO has been the more volatile fund at 19.1% annualized versus 15.3% for VTI. Worst drawdown: VTI -56.6% vs VTWO -42.4%.
Should I hold both VTI and VTWO?
VTI and VTWO have a monthly-return correlation of 0.90, so they move almost identically. Holding both adds little diversification - most investors pick one, usually on fees or the specific index tracked.
What is the holdings overlap between VTI and VTWO?
VTI and VTWO share 1405 common holdings with a 1.1% weight overlap. Combined, they hold 3321 unique securities.
Which pays a higher dividend, VTI or VTWO?
VTI yields 1.07% while VTWO yields 1.39%, so VTWO currently pays the higher dividend yield.
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