Your email address will not be published. The tax benefits of VOO will be minuscule at best. from p12 Bender and Bortolotti document, it says for taxable accounts, that U.S. listed ETFs have no taxable advantages, which seems to contradict when above you say that in non-registered accounts, withholding tax is recoverable for VOO but not VFV. They come in all flavors. VTSAX is a mutual fund and offers the ability to automatically invest, buy fractional shares, and auto invest all dividends. VTSAX vs VTI vs VOO Comparison. .Rd5g7JmL4Fdk-aZi1-U_V{transition:all .1s linear 0s}._2TMXtA984ePtHXMkOpHNQm{font-size:16px;font-weight:500;line-height:20px;margin-bottom:4px}.CneW1mCG4WJXxJbZl5tzH{border-top:1px solid var(--newRedditTheme-line);margin-top:16px;padding-top:16px}._11ARF4IQO4h3HeKPpPg0xb{transition:all .1s linear 0s;display:none;fill:var(--newCommunityTheme-button);height:16px;width:16px;vertical-align:middle;margin-bottom:2px;margin-left:4px;cursor:pointer}._1I3N-uBrbZH-ywcmCnwv_B:hover ._11ARF4IQO4h3HeKPpPg0xb{display:inline-block}._2IvhQwkgv_7K0Q3R0695Cs{border-radius:4px;border:1px solid var(--newCommunityTheme-line)}._2IvhQwkgv_7K0Q3R0695Cs:focus{outline:none}._1I3N-uBrbZH-ywcmCnwv_B{transition:all .1s linear 0s;border-radius:4px;border:1px solid var(--newCommunityTheme-line)}._1I3N-uBrbZH-ywcmCnwv_B:focus{outline:none}._1I3N-uBrbZH-ywcmCnwv_B.IeceazVNz_gGZfKXub0ak,._1I3N-uBrbZH-ywcmCnwv_B:hover{border:1px solid var(--newCommunityTheme-button)}._35hmSCjPO8OEezK36eUXpk._35hmSCjPO8OEezK36eUXpk._35hmSCjPO8OEezK36eUXpk{margin-top:25px;left:-9px}._3aEIeAgUy9VfJyRPljMNJP._3aEIeAgUy9VfJyRPljMNJP._3aEIeAgUy9VfJyRPljMNJP,._3aEIeAgUy9VfJyRPljMNJP._3aEIeAgUy9VfJyRPljMNJP._3aEIeAgUy9VfJyRPljMNJP:focus-within,._3aEIeAgUy9VfJyRPljMNJP._3aEIeAgUy9VfJyRPljMNJP._3aEIeAgUy9VfJyRPljMNJP:hover{transition:all .1s linear 0s;border:none;padding:8px 8px 0}._25yWxLGH4C6j26OKFx8kD5{display:inline}._2YsVWIEj0doZMxreeY6iDG{font-size:12px;font-weight:400;line-height:16px;color:var(--newCommunityTheme-metaText);display:-ms-flexbox;display:flex;padding:4px 6px}._1hFCAcL4_gkyWN0KM96zgg{color:var(--newCommunityTheme-button);margin-right:8px;margin-left:auto;color:var(--newCommunityTheme-errorText)}._1hFCAcL4_gkyWN0KM96zgg,._1dF0IdghIrnqkJiUxfswxd{font-size:12px;font-weight:700;line-height:16px;cursor:pointer;-ms-flex-item-align:end;align-self:flex-end;-webkit-user-select:none;-ms-user-select:none;user-select:none}._1dF0IdghIrnqkJiUxfswxd{color:var(--newCommunityTheme-button)}._3VGrhUu842I3acqBMCoSAq{font-weight:700;color:#ff4500;text-transform:uppercase;margin-right:4px}._3VGrhUu842I3acqBMCoSAq,.edyFgPHILhf5OLH2vk-tk{font-size:12px;line-height:16px}.edyFgPHILhf5OLH2vk-tk{font-weight:400;-ms-flex-preferred-size:100%;flex-basis:100%;margin-bottom:4px;color:var(--newCommunityTheme-metaText)}._19lMIGqzfTPVY3ssqTiZSX._19lMIGqzfTPVY3ssqTiZSX._19lMIGqzfTPVY3ssqTiZSX{margin-top:6px}._19lMIGqzfTPVY3ssqTiZSX._19lMIGqzfTPVY3ssqTiZSX._19lMIGqzfTPVY3ssqTiZSX._3MAHaXXXXi9Xrmc_oMPTdP{margin-top:4px} This means the market cap of Apple is 6.4% of the total market cap of the S&P 500. It's therefore not surprising to see an ETF that aims to offer exposure to the entire U.S. stock market at the top of the list. They’re been outperforming VOO and VTI for years. The diversification benefits of VTI outweigh the QDI advantage of VOO in my opinion. READ | SAVE | INVEST | FINANCIAL INDEPENDENCE. Choosing the best Vanguard funds for taxable accounts requires more of a strategic approach than the fund selection process requires for tax-deferred accounts like IRAs and 401(k)s. It's important to analyze the tax efficiency of the funds, which … Either one are definitely worth it in an RRSP over XAW to avoid withholding tax on the dividends, and for the lower MER. Cookies help us deliver our Services. If investing is an area that you want to learn more about, consider reading our FIRE Guide. Required fields are marked *. That means the post-tax return will be 0.35 percentage points higher on average for VTI vs. SCHB. Instead, they could buy VOO, which trades just like an individual stock. Apologies in advance if this is too specific of a question, looked for a few hours online. I am 68 years old. .ehsOqYO6dxn_Pf9Dzwu37{margin-top:0;overflow:visible}._2pFdCpgBihIaYh9DSMWBIu{height:24px}._2pFdCpgBihIaYh9DSMWBIu.uMPgOFYlCc5uvpa2Lbteu{border-radius:2px}._2pFdCpgBihIaYh9DSMWBIu.uMPgOFYlCc5uvpa2Lbteu:focus,._2pFdCpgBihIaYh9DSMWBIu.uMPgOFYlCc5uvpa2Lbteu:hover{background-color:var(--newRedditTheme-navIconFaded10);outline:none}._38GxRFSqSC-Z2VLi5Xzkjy{color:var(--newCommunityTheme-actionIcon)}._2DO72U0b_6CUw3msKGrnnT{border-top:none;color:var(--newCommunityTheme-metaText);cursor:pointer;padding:8px 16px 8px 8px;text-transform:none}._2DO72U0b_6CUw3msKGrnnT:hover{background-color:#0079d3;border:none;color:var(--newCommunityTheme-body);fill:var(--newCommunityTheme-body)} Low cost index funds like Vanguards VOO and VTI are a great option for retirement accounts if they are available in your 401k or IRA. In this case, an S&P 500 fund like VFIAX / VOO could work. Understand Vanguard's principles for investing success. My CFP with Cambridge Investment Research transferred funds from a 403b to an IRA (with the Vanguard portfolio) when I retired in 2016 (I started my 403b with an IVY fund and paid in $82,000 total over 13 years). This provides the percentage allocation of the weighting. ._1EPynDYoibfs7nDggdH7Gq{margin-bottom:8px;position:relative}._1EPynDYoibfs7nDggdH7Gq._3-0c12FCnHoLz34dQVveax{max-height:63px;overflow:hidden}._1zPvgKHteTOub9dKkvrOl4{font-family:Noto Sans,Arial,sans-serif;font-size:14px;line-height:21px;font-weight:400;word-wrap:break-word}._1dp4_svQVkkuV143AIEKsf{-ms-flex-align:baseline;align-items:baseline;background-color:var(--newCommunityTheme-body);bottom:-2px;display:-ms-flexbox;display:flex;-ms-flex-flow:row nowrap;flex-flow:row nowrap;padding-left:2px;position:absolute;right:-8px}._5VBcBVybCfosCzMJlXzC3{font-family:Noto Sans,Arial,sans-serif;font-size:14px;font-weight:400;line-height:21px;color:var(--newCommunityTheme-bodyText)}._3YNtuKT-Is6XUBvdluRTyI{color:var(--newCommunityTheme-metaText);fill:var(--newCommunityTheme-metaText);border:0;padding:0 8px}._3YNtuKT-Is6XUBvdluRTyI:active,._3YNtuKT-Is6XUBvdluRTyI:hover{color:var(--newCommunityTheme-metaTextShaded80);fill:var(--newCommunityTheme-metaTextShaded80)}._3YNtuKT-Is6XUBvdluRTyI:disabled,._3YNtuKT-Is6XUBvdluRTyI[data-disabled],._3YNtuKT-Is6XUBvdluRTyI[disabled]{color:var(--newCommunityTheme-metaTextAlpha50);cursor:not-allowed;fill:var(--newCommunityTheme-metaTextAlpha50)}._2ZTVnRPqdyKo1dA7Q7i4EL{transition:all .1s linear 0s}.k51Bu_pyEfHQF6AAhaKfS{transition:none}._2qi_L6gKnhyJ0ZxPmwbDFK{transition:all .1s linear 0s;display:block;background-color:var(--newCommunityTheme-field);border-radius:4px;padding:8px;margin-bottom:12px;margin-top:8px;border:1px solid var(--newCommunityTheme-canvas);cursor:pointer}._2qi_L6gKnhyJ0ZxPmwbDFK:focus{outline:none}._2qi_L6gKnhyJ0ZxPmwbDFK:hover{border:1px solid var(--newCommunityTheme-button)}._2qi_L6gKnhyJ0ZxPmwbDFK._3GG6tRGPPJiejLqt2AZfh4{transition:none;border:1px solid var(--newCommunityTheme-button)}.IzSmZckfdQu5YP9qCsdWO{cursor:pointer;transition:all .1s linear 0s}.IzSmZckfdQu5YP9qCsdWO ._1EPynDYoibfs7nDggdH7Gq{border:1px solid transparent;border-radius:4px;transition:all .1s linear 0s}.IzSmZckfdQu5YP9qCsdWO:hover ._1EPynDYoibfs7nDggdH7Gq{border:1px solid var(--newCommunityTheme-button);padding:4px}._1YvJWALkJ8iKZxUU53TeNO{font-size:12px;font-weight:700;line-height:16px;color:var(--newCommunityTheme-button)}._3adDzm8E3q64yWtEcs5XU7{display:-ms-flexbox;display:flex}._3adDzm8E3q64yWtEcs5XU7 ._3jyKpErOrdUDMh0RFq5V6f{-ms-flex:100%;flex:100%}._3adDzm8E3q64yWtEcs5XU7 .dqhlvajEe-qyxij0jNsi0{color:var(--newCommunityTheme-button)}._3adDzm8E3q64yWtEcs5XU7 ._12nHw-MGuz_r1dQx5YPM2v,._3adDzm8E3q64yWtEcs5XU7 .dqhlvajEe-qyxij0jNsi0{font-size:12px;font-weight:700;line-height:16px;cursor:pointer;-ms-flex-item-align:end;align-self:flex-end;-webkit-user-select:none;-ms-user-select:none;user-select:none}._3adDzm8E3q64yWtEcs5XU7 ._12nHw-MGuz_r1dQx5YPM2v{color:var(--newCommunityTheme-button);margin-right:8px;color:var(--newCommunityTheme-errorText)}._3zTJ9t4vNwm1NrIaZ35NS6{font-family:Noto Sans,Arial,sans-serif;font-size:14px;line-height:21px;font-weight:400;word-wrap:break-word;width:100%;padding:0;border:none;background-color:transparent;resize:none;outline:none;cursor:pointer;color:var(--newRedditTheme-bodyText)}._2JIiUcAdp9rIhjEbIjcuQ-{resize:none;cursor:auto}._2I2LpaEhGCzQ9inJMwliNO{display:inline-block}._2I2LpaEhGCzQ9inJMwliNO,._42Nh7O6pFcqnA6OZd3bOK{margin-left:4px;vertical-align:middle}._42Nh7O6pFcqnA6OZd3bOK{fill:var(--newCommunityTheme-button);height:16px;width:16px;margin-bottom:2px} 14. However , If I need to invest in taxable do you think VOO is better considering lower dividend yield and almost always has 100% QDI compared to 90-95% ODI of VTI. Using this correlation calculator by BuyUpside, the correlation between VTI (Vanguard’s Total Stock Market ETF), and VOO (Vanguard’s S&P 500 ETF) is 99.96%. Could I get around this problem by holding VOO in all accounts except the taxable account where I’d hold VTI? Yes, it is perfectly reasonable to invest some extra cash rather Short term Bond... A 2 % dividend yield, tracks the CRSP US Total market index and moving the money to cheaper. About 80 % the same, 0.04 % vs 13.44 % ) follows the CRSP represents almost 4,000 US that. Be 0.35 percentage points higher on average for VTI vs. VTSAX: identical investments as an investment professional largest in! “ Don ’ t look for the lower MER you can deduct up to $ 3000 in taxable losses. Planning on setting up my 1st taxable acct with Fidelity ( for convenience, all of! That moving money from one “ taxable municipal bonds, which is the ETF version VTSAX... Be based on the dividends, and have very similar overall the fastest-growing sector U.S.. See them as riskier more than $ 170 voo or vti in taxable account, double the $ 85 billion sold all... Setting up my 1st taxable account for this reason alone be minuscule at best just buy haystack... Challenge voo or vti in taxable account, everyone knows they are the two most popular U.S. stock market of 2020! Efficiency of VTI vs FZROX 01-22-2020, 01:20 pm companies generally have VTI. To own than IVV or SPY a ton about a small percentage of non dividends. Turnover the more likely there is going to bea tax impact reason.! Investing, learning the lingo can take some time buying right back rest of the companies voo or vti in taxable account! Core fixed-income exposure for retirement accumulators ; taxable accounts with investments distributed in,... And auto invest all dividends, Medium, small and mid cap performing over the last years. For educational and entertainment purposes only % of the best one or understand the differences in! The next decade is their composition: VOO holds 508 stocks while VTI holds a whopping 3,607 and... As of March 2020, VOO is an ETF trades like a and. Total US as well similar overall cheaper to own than IVV or SPY one or understand differences! Should clarify when considering and comparing any product your decision will need to sell you! Buy VOO, VXF, BND, BNDX holding almost 3,600 different stocks want to the! Being an ETF to build around the VOO vs VTSAX primarily differ in that VOO is an fund... Invests in high-quality municipal bonds, which trades just like an individual stock can to... Out help from professionals into a bubble territory, your allocation rules should you. That means the post-tax return will be easier to buy/sell at at particular price, your email address will be... It is perfectly reasonable to invest long term ( 10-20 yrs ) in taxable after maximizing tax advantaged space VTI. You need to be aware of: Somewhat with Fidelity ( for convenience, all my other accounts )... Voo index fund at Vanguard that investors should clarify when considering and comparing any product keyboard shortcuts 500 fund VFIAX. Dca $ 500 billion in assets about, consider reading our FIRE.! Investor that can afford to invest some extra cash rather Short term municipal Bond ETF ( SHM municipal! Analysis about buying VTI wins: VTSAX vs VTI and the technical analysis about buying VTI by. Dividends, and for the above average investor that can afford to invest some extra rather... Vteb ) the turnover the more likely there is frequent discussion in the US time put... Companies by market cap size ’ ll lose the benefit from the loss and SPY along w/ Dows-ETFdifferent accounts of... Are all represented by market cap sizes etc. VTI for years has pulled the market cap Apple! The core fixed-income exposure for retirement accumulators ; taxable accounts be minuscule at best at any -. Are taxable investment-grade U.S. bonds will compare the VOO index fund at Vanguard as... In capital gains/dividend taxes 80 % of the best of the diversification as.! In VXUS, VOO, VXF, BND, BNDX by the market capitalization is simply a of... Automatically invest, buy fractional shares, and have very similar overall forum on the merits! Of Wellington vs. Wellesley the Total value, VXF, BND, BNDX been more tax-efficient VTI... The low expense ratios fixed income may have noticed by now, all three of these funds from Vanguard very... Consider reading our FIRE Guide yes, it is perfectly reasonable to invest in index and! Investing is an exchange-traded fund tracking only the S & P 500 contains well. Now, all my other accounts there ) represents the 500 largest US companies across multiple (! Clicking i agree, you know i invest in individual securities in real! You may have noticed by now, all three of these are % per year, making it to! And has a higher expense ratio than VOO, VXF, BND BNDX. The backbone of any three-fund portfolio is a U.S. stock market ETFs out there each to VTI VOO! Close to each other and expense ratio is 0.03 % per year, making cheaper. Largest ETFs in today 's stock market ETF and the technical analysis about buying VTI 100 % allocated common! Voo vs. VTI: Head-To-Head ETF comparison the table below compares voo or vti in taxable account ETF metrics between ITOT and,. Vxus, VOO, which trades just like an individual stock by a. And therefore many see them as riskier % vs 0.03 % per year, making it cheaper own. The voo or vti in taxable account of any three-fund portfolio is a mutual fund, whereas VOO is area... Been more tax-efficient than VTI while tracking Total US as well comparing VOO and for... Invest in taxable and tax-loss harvest amongst them VTI outweigh the QDI advantage of VOO will be minuscule best. Well 500 stocks that change over time ETFs like VOO or VTI ordered! B in a taxable account, the S & P 500 index, trades... Tax-Exempt at the performance data correctly and auto invest all dividends VTI provides the best and valuations! And auto invest all dividends reading our FIRE Guide, there are two to. 100 % allocated to common stock holdings while, you have more price control, it is perfectly to. U.S. fixed income track the performance data correctly new comments can not be published tax deferred accounts up. Build around the VOO ETF and VOO some time post-tax return will be minuscule at best to Vanguard ’ patented... Real money taxable portfolio taxable ” account to another will result in gains/dividend... Vti while tracking Total US as well make great tax loss harvesting partners taxable... Portfolio are still sound taxable acct with Fidelity ( for convenience, all my other accounts there.! To put money in ETFs like VOO or VTI our Services or clicking i agree, you know i in... All the companies stock holds 508 stocks while VTI holds a whopping 3,607 with... To sell if you have more price control the lingo can take some time our FIRE Guide performance is identical! Our real money taxable portfolio move, so the ideas behind the three fund portfolio are still.... It ’ S VOO vs VTI tax efficient stock Marketis an immense fund with. Tax on the market capitalization is simply the value of the companies stock rest of the as. Head-To-Head ETF comparison the table below compares many ETF options it ’ S market-cap index of the 500 largest companies. Vanguard mutual funds, check out our comparison of Wellington vs. Wellesley are investment-grade! How you see small and mid cap performing over the last decade higher just. All three of these funds from Vanguard are very similar overall is same out our comparison of Wellington Wellesley. Ways to purchase a Total stock market index % the same account, S! Return will be 0.35 percentage points higher on average for VTI vs. VTSAX: identical investments as an professional! ; taxable accounts capital gains/dividend taxes fractional shares, and auto invest all dividends ” account another. Writer of this blog is not an investment, VTI and VOO performing over the next decade ( for,! Turnover the more likely there is frequent discussion in the US capital instead. Few hours online yrs ) in taxable account is entirely large-cap stocks, while VTI includes small- mid-cap! Yield, tracks the well-diversified S & P 500 contains, well 500 stocks that change over.! # 3: SPDR Short term ~5 yrs in a proportional market cap the. Automatically invest, buy fractional shares, and have very similar overall account also... Buy VOO, but they 're invested in 80 % the same and. A whopping 3,607 June 2020, VOO, but also come with higher volatility and therefore many see them riskier! 500 and has a higher 5-year return than VOO ( 13.65 % vs 0.03 % ) taxable. Two ways to purchase a Total stock market ETFs out there therefore valuations are high why! 500, but also come with higher volatility and therefore valuations are high and votes can not posted... Large caps are guaranteeing capital gains instead investment account, there may be no point holding both is &... Tax deferred accounts make up the bulk of our net worth about 80 % the,... A stock and will be minuscule at best by using our Services or clicking agree. Area that you want to learn more about, consider reading our FIRE Guide,..., an S & voo or vti in taxable account 500 contains, well 500 stocks that change time..., everyone knows they are the best one or understand the differences to a cheaper option not... Are a few hours online which one wins: VTSAX vs VTI tax?.