Full Comparison of S&P 500 / Total Market: VOO vs VTI vs IVV — Performance, Fees, Taxes
Educational content only; not investment advice.
If you’re building a passive portfolio, the debate usually narrows to three tickers: VOO (Vanguard S&P 500), IVV (iShares S&P 500) and VTI (Vanguard Total Stock Market). Below we explain what the indices cover, what you actually pay (TCO), how tracking difference works, what matters for dividends and taxes, and who each ETF best fits.
What the Indices Cover: S&P 500 vs Total Market
S&P 500 (VOO & IVV) tracks ~500 of the largest U.S. public companies — the large-cap core of the market, historically ~75–80% of U.S. market cap.
VOO and IVV follow the same S&P 500 index. Differences are provider specifics, internal processes, securities lending, broker fees, and fractional-share availability. Over long horizons their behavior is nearly identical.
Total Market (VTI — CRSP US Total Market) = the whole U.S. market: large + mid + small + micro caps (thousands of stocks). Versus S&P 500, you get an extra ~20% in mid/small caps, which helps or hurts depending on the cycle.
VTI adds a bit more market diversification. When small/mid caps run hot (or bounce from undervaluation), divergence from S&P 500 can be more visible.
Solution:
Want a benchmark core with maximum recognition and liquidity? VOO/IVV. The choice often comes down to infrastructure details: your broker’s fees, access to fractional shares, and the bid/ask spread you see.
Want the broadest single U.S. basket? VTI gives you the Total Market ETF exposure, including the “long tail” beyond the mega caps.
Fees: Expense Ratio and True Cost (TCO)
Expense ratios are ultra-low for all three (as of late 2025 typically ~0.03%/yr). Always check the providers’ current pages.
Bid/ask spreads are razor-thin for VOO/IVV thanks to enormous liquidity; VTI is also tight. Spread and slippage are your hidden entry/exit costs.
Because of securities lending and operational nuances, the realized annual return can deviate from the index by a few basis points—sometimes positive, sometimes negative. Review annual reports and third-party summaries.
TCO approach: add up expense ratio + spread + broker/exchange fees + taxes. Compare ETFs on total cost of ownership, not just a single headline fee.
Taxes and Dividends: What to Know
Jurisdiction: VOO, IVV, and VTI are U.S.-domiciled and pay dividends (usually quarterly).
Dividend withholding for non-U.S. residents depends on your tax residency and double-tax treaty eligibility filed via Form W-8BEN. The baseline U.S. withholding is 30%, often reduced to 15% by treaty—check your country’s rate.
Capital gains distributions are uncommon in U.S. ETFs thanks to in-kind creation/redemption, which is tax-efficient.
European investors sometimes prefer UCITS equivalents (e.g., VUSA/CSPX for S&P 500), but those are different funds with different prospectuses and tax logic.
Liquidity, Size, and Execution
All three are multi-billion AUM with deep order books and high daily turnover.\
Execution is typically “cleanest” in the EU–US overlap (~13:00–17:00 UTC / 14:00–18:00 CET): tighter spreads, deeper books.
For larger tickets, use limit orders and stage entries to reduce slippage.
FAQ
VOO vs VTI — which is better long-term?
No universal winner. VTI is broader (adds small/mid caps); VOO is the large-cap core. Performance gaps are cyclical.
VOO vs IVV — does it matter?
Both are S&P 500 ETFs with ultra-low fees and massive liquidity. Focus on your broker costs, spreads, and convenience (e.g., fractional shares).
Do they have accumulating versions?
No—these three are distributing. For accumulating, check UCITS alternatives (different lineup & tax treatment).
DCA or lump sum?
Both work. DCA reduces behavior risk of bad timing; lump sum historically often wins in rising markets. It’s part of your risk policy. If you’re entering in tranches (DCA), you can park cash in Hexn fixed-income products up to 20% APY to reduce the “cost of waiting” before your ETF orders fill.
Pre-Buy Checklist
- Calculate TCO: fund fee + spread + broker fee + dividend withholding tax.
- Pick the execution window: EU–US overlap, limit orders, staged entry.
- Set portfolio weights: S&P 500 core (VOO/IVV) or Total Market (VTI) + international equities/bonds.
- Plan rebalancing: quarterly or at ±5 pp drift bands.
- Keep records: statements/dividend reports & fees for tax filing.
Takeaways
VOO and IVV are interchangeable S&P 500 ETF anchors with minimal costs and maximum liquidity. VTI is the Total Market ETF that adds small/mid caps for full U.S. coverage. Choose based on index scope, total cost of ownership (TCO), and your broker’s execution quality. Over the long run, disciplined rebalancing and cost control matter far more than micro-differences between two S&P 500 funds.
If your strategy includes “smart cash,” Hexn deposits fit naturally between tranches—bridging waiting periods and making the entry window less expensive while you scale into VOO vs VTI vs IVV.