VFIAX vs VTSAX - Total Stock Market Or S&P 500 Fund? (Comparison)

Vanguard’s Total Stock Market fund (VTSAX) and S&P 500 fund (VFIAX) are some of the most popular investment funds on the planet. VTSAX and VFIAX are virtually indistinguishable in form and function.

VTSAX and VFIAX will provide similar returns because a large portion of their holdings are in the same companies. VFIAX holds about 1/7th of the stocks of VTSAX but has posted similar returns over time. Both VTSAX and VFIAX represent the same professionally managed core basket of individual stocks.

Which is better, VTSAX or VFIAX?

VTSAX and VFIAX are both great choices when it comes to selecting an index fund for the long term. While VTSAX provides exposure to the total stock market, VFIAX will provide exposure only to the largest companies in the stock market. As you’ll notice, VTSAX and VFIAX are similar in structure and in their top 10 holdings. Both index funds will provide you with similar returns over time.

Similarities between VFIAX and VTSAX:

  • Expense ratio’s of 0.04%

  • $3,000 minimum investment

  • Trade after hours at a settled cost

  • Over 20-years of history of returns

  • A long history of returns

  • Large blend holding category

  • Similar top 10 holdings

Vanguard Total Stock Market Index Fund (VTSAX)

VTSAX
Fund Inception 1992
Dividend (TTM) $1.37
Expense Ratio 0.04%
Number of Stocks 3,755
Top 10 Holdings 22.1%
Foreign Holdings 0.0%

VTSAX was created in 1992 and was designed to provide investors exposure to the entire U.S. stock market by tracking the performance of the CRSP US Total Market Index.

Investing in VTSAX is akin to investing in the total American economy. The low-fee nature and broad exposure of VTSAX have allowed it to become the most popular index fund in the world. Wondering why VTSAX is such a popular investment in the personal finance community?

At the time of the last update per Vanguard on 4/30/2021, here are the top 10 holdings within VTSAX:

  1. Apple Inc.

  2. Microsoft Corp.

  3. Amazon.com Inc.

  4. Alphabet Inc.

  5. Facebook Inc.

  6. Tesla Inc.

  7. Berkshire Hathaway Inc.

  8. JPMorgan Chase & Co.

  9. Johnson & Johnson

  10. Visa Inc.

VTSAX historical returns

Here are the returns that VTSAX has posted over the 1-, 3-, 5-, 10-year, and since inception:

1-Year: 51.05%

3-Year: 18.95%

5-Year: 17.67%

10-Year: 14.02%

Since Inception (1992): 8.28%

VTSAX has returned 8% per year on average over the long run. This type of dependable figure is used to calculate your financial independence number or the number at which you will be able to pay yourself in retirement instead of relying on earned income from an employer.

Vanguard 500 Index Fund (VFIAX)

VFIAX
Fund Inception 2000
Dividend (TTM) $5.39
Expense Ratio 0.04%
# of Stocks 507
Top 10 Holdings 28%
Foreign Holdings 0.0%

VFIAX was created in 2000 and was designed to provide investors exposure to 500 of the largest U.S. companies by tracking the performance of the S&P 500.

Investing in VFIAX provides the investor with exposure to the top companies on the U.S. Stock Exchange.

At the time of the last update per Vanguard on 4/30/2021, here are the top 10 holdings within VFIAX:

  1. Apple Inc.

  2. Microsoft Corp.

  3. Amazon.com Inc.

  4. Alphabet Inc.

  5. Facebook Inc.

  6. Tesla Inc.

  7. Berkshire Hathaway Inc.

  8. JPMorgan Chase & Co.

  9. Johnson & Johnson

  10. Visa Inc.

VFIAX historical returns

Here are the returns that VFIAX has posted over the 1-, 3-, 5-, 10-year, and since inception:

1-Year: 45.96%

3-Year: 18.63%

5-Year: 17.38%

10-Year: 14.14%

Since Inception (2000): 7.75%

VTSAX vs VFIAX - The Verdict

If you’re interested in achieving financial independence by retirement age or sooner, then debating between VTSAX and VFIAX is not going to make much of a difference. They’re both quality investments backed by a reputable company and I’m confident they’ll be around for years to come.

VTSAX and VFIAX are just a few of the many ways to own a slice of the U.S. economy. All major investment brands have their version of the Total Stock Market Index Fund. Fidelity, Schwab, etc.

VTSAX and VFIAX are virtually indistinguishable and common investors would be well served in owning either of these funds for the long haul. I personally have dedicated a large portion of my retirement investment to VTSAX through my previous employer’s 401k.

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