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VTI vs ITOT

Posted: Tue May 14, 2013 5:16 pm
by akpk
I would like to use VTI (Vanguard Total Market Index) for my taxable account. I intend to contribute monthly. But i use Fidelity and like them. Fidelity offers iShares ITOT which doesn't have any trading cost. What would gurus recommend - using ITOT instead of VTI. Or shall i open a brokerage account with Vanguard to avoid etf monthly buying cost (which is $7.95 on fidelity. I would like to add that i used vanguard brokerage service few years back and didn't like it. They don't have any match in mutual funds :-)

Re: VTI vs ITOT

Posted: Tue May 14, 2013 5:31 pm
by red5
Just my 2 cents,

It appears they track different indexes, both of which are meant to be all encompassing of the US market. ITOT tracks the S&P Total US Stock Market.

Anyways, according to a M* growth chart, VTI gained 7.4% per year for the last 9 years while ITOT gained 6.9% per year for the last 9 years. On a 10K investment, that is about 800 extra bucks for VTI. Possible reasons may be higher expenses for ITOT (granted now they are quite close, I'm not sure what the difference was in past years) and ITOT has a slightly smaller Small Cap position. Plus they track a different index.

I'll leave it to you to decide what is best, I'm merely passing on a tidbit of information to you.

Re: VTI vs ITOT

Posted: Tue May 14, 2013 5:40 pm
by akpk
You make a very good point. This crossed my mind too and that's why i am reluctant to go for ITOT ( VTI is much broader with 3500+ stocks i think. ITOT is just 1500.). I wish fidelity offered VTI free trading like for some ishares etfs.

Re: VTI vs ITOT

Posted: Tue May 14, 2013 6:55 pm
by LazyNihilist
akpk,

TDAmeritrade has quite a few commission free ETF's. 32 from Vanguard I believe with VTI among them.
I used this a few years back, but I moved everything to Vanguard Mutual Funds for simplicity.

Re: VTI vs ITOT

Posted: Tue May 14, 2013 7:11 pm
by Middle
If you are using Fidelity why not use Spartan Total U.S. Stock Index? Very comparable to VTI. Unless you really want the ETF for some reason.

Re: VTI vs ITOT

Posted: Wed May 15, 2013 4:28 am
by red5
VTI's slight outperformance could always go the other way too, perhaps ITOT would outperform in an environment where the large caps are outperforming the small caps ? Who knows.

Re: VTI vs ITOT

Posted: Wed May 15, 2013 1:31 pm
by akpk
Thank you all. All very Good and helpful advice.

Yesterday, i read a thread in this forum where some wise person made a suggestion that over the long period, interest you earn on funds adds more to your portfolio than the price increase. This had me thinking. With ETF's i think i will have to manually ago and reinvest the yearly dividends. I am leaning more towards total market index mutual fund (vanguard or fidelity) now.

Thanks again for the wonderful points. I am a boglehead now.