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Unleash the Power of Your Investments: Discover the Elite ETF That Can Fuel Your Financial Journey!


There’s an exchange-traded fund (ETF) called VTI (Vanguard Total Market Index) that has consistently outperformed the S&P 500 (SPY, IVV) over the long term.

This is due to a fundamental difference in their approach.

The S&P 500 tracks only the 500 largest publicly traded companies in the US.

While VTI, on the other hand, invests in over 3,700 companies of all sizes, from small to large.

Smaller companies typically experience faster growth than larger companies, as they have more room to expand.

Over time, this growth potential leads to higher returns for VTI.

Historical performance data shows that VTI has consistently beaten the S&P 500 over extended periods, such as the past 10 and 23 years.

Although there have been brief periods where the S&P 500 has outperformed, VTI has remained ahead over the long run.

This performance gap can have a significant impact on your retirement savings.

If you invest the same amount in both VTI and the S&P 500 over a 40-year period, assuming a 9.5% return, VTI’s higher growth potential would result in a portfolio worth $550,000 more at retirement.

Additionally, it’s important to consider taxes.

VTI is more tax-efficient than the S&P 500 because larger companies tend to pay higher dividends, which are taxed at ordinary income rates.

While VTI has historically outperformed, it’s not guaranteed to do so in the future.

However, its broad diversification across different company sizes gives it a strong advantage over the S&P 500 in terms of long-term wealth accumulation.

  • Key Takeaways

Diversification is key to long-term investment success

VTI’s outperformance over the S&P 500 is attributed to its investment in a wider range of companies, providing diversification and reducing risk.

Small-cap companies have higher growth potential than large-cap companies

Smaller companies in VTI’s portfolio typically experience faster growth and higher returns compared to larger companies in the S&P 500.

Tax efficiency favors broad market index funds like VTI over sector-specific funds

VTI’s holdings in smaller companies tend to pay lower dividends, resulting in higher tax efficiency compared to the S&P 500’s focus on large companies with higher dividend yields.

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