We compare VTSAX vs VFIAX:
Vanguard Total Stock Market Index Fund Admiral Shares (VTSAX) vs Vanguard 500 Index Fund Admiral Shares (VFIAX)
One of the most common questions is which Vanguard Admiral Fund is the best investment. So I’ve compared many of Vanguard’s most popular funds.
I also share how you can start taking advantage of these two funds by investing in the equivalent exchange-traded funds (ETFs), buying fractional shares, or getting started with investor shares.
- VTSAX vs VFIAX
- VTSAX vs VFIAX Performance
- VFIAX and VTSAX Differences
- VTSAX Profile
- VTSAX Performance
- VTSAX Holdings
- VFIAX Profile
- VFIAX Performance
- VFIAX Holdings
- Admiral Funds Have A Minimum Investment
- Investing Tips
- Equivalent Exchange-Traded Funds
- Buying Fractional Shares
- Starting With Investor Shares
- Which Is Better VTSAX vs VFIAX?
VFIAX vs FXAIX: Which Is The Best S…
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VTSAX vs VFIAX
The primary difference between VTSAX and VFIAX is the index they track. VTSAX tracks the CRSP US Total Market Index, while VFIAX tracks the S&P 500 index.
Vanguard Total Stock Market Index Fund Admiral Shares (VTSAX) provides investors with exposure to the entire United States equity market. The U.S. equity market includes small, mid, and large-cap growth and value stocks.
Vanguard 500 Index Fund Admiral Shares (VFIAX) exposes investors to 500 of the largest companies in the United States. This accounts for about three-quarters of the U.S. stock market’s value.
Another significant difference is the number of stocks in each, with VTSAX having 3,535 different companies in the index compared to 509 with VFIAX.
VTSAX
- Fund Inception: 2000
- Tracks the CRSP US Total Market Index
- Expense Ratio: 0.04%
- Vanguard Fund
- Minimum Initial Investment: $3,000
- Number Of Stocks: 3,535
- Equivalent ETF (VTI)
VFIAX
- Fund Inception: 2000
- Tracks the S&P 500 Index
- Expense Ratio: 0.04%
- Admiral Mutual Fund
- Minimum Investment: $3,000
- Number Of Stocks: 509
- Top 10 Holdings: 30%
- Yield 1.27%
VTSAX vs VFIAX Performance
Although VTSAX and VFIAX track different indexes, their performance is similar. For example, over the last 5 years, VFIAX has outperformed VTSAX by 0.5% per year.
(Video) VTSAX vs VFIAX (Which One Is Better)?
Here is how their performance compares over the last 10 years:
As you can see from the chart, they perform almost identically, with VFIAX outperforming slightly.
Similarities between VFIAX and VTSAX:
- Vanguard Admiral Funds
- Similar Performance
- Broad Diversification
- Low Expense Ratios
VFIAX and VTSAX Differences
The main difference between VFIAX and VTSAX is the index they track. VFIAX tracks the S&P 500 index, while VTSAX tracks the CRSP U.S. Total Market Index. This gives VTSAX more diversification.
Differences between VFIAX and VTSAX:
- Track Different Indexes
- Number Of Holdings
- Diversification
VTSAX Profile
- Fund Inception: 2000
- Tracks the CRSP US Total Market Index
- Expense Ratio: 0.04%
- Vanguard Fund
- Minimum Initial Investment: $3,000
- Number Of Stocks: 3,535
- Equivalent ETF (VTI)
Vanguard Total Stock Market Index Fund Admiral Shares (VTSAX) represent close to 100% of the U.S. equity market that is publicly traded. It also tracks the CRSP U.S. Total Market Index.
Vanguard’s VTSAX has an expense ratio of 0.04%.
This notably implies that the fund has limited exposure to several international stocks.
However, this does not affect the companies represented in the fund. These stocks have a significant international presence.
VTSAX Performance
Vanguard Total Stock Market Index Fund Admiral Shares (VTSAX) is popular for many reasons, of which consistent returns are a significant part.
Its risk level is similar to that of the S&P 500.
VTSAX Holdings
Vanguard’s VTSAX comprises Apple, Microsoft, Google, Amazon, and Tesla and provides exposure to over 3,500 stocks.
Here are the top 10 holdings for VTSAX:
Major sectors in the index include:
(Video) VTSAX vs VFIAX [Which Index Fund Has Better Returns?]
- Healthcare
- Technology
- Consumer Services
- Financials
- Industrials
The top 10 holdings make up 25% of its total net assets.
VFIAX Profile
- Fund Inception: 2000
- Tracks the S&P 500 Index
- Expense Ratio: 0.04%
- Admiral Mutual Fund
- Minimum Investment: $3,000
- Number Of Stocks: 509
- Top 10 Holdings: 30%
- Yield 1.27%
Vanguard 500 Index Fund Admiral Shares (VFIAX) provides investors exposure to 500 of the largest companies in the U.S.
This accounts for about three-quarters of the United States stock market’s value.
VFIAX is the admiral version of the Vanguard S&P 500 ETF (VOO).
VFIAX was created in 2000 and has an expense ratio of 0.04%.
Super low expense ratios and strong diversification make Vanguard funds like VFIAX very attractive for long-term investors.
VFIAX Performance
Vanguard’s VFIAX aims to have the same performance returns as the S&P 500 index. Therefore, VFIAX and the S&P 500 should always overlap closely.
VFIAX Holdings
These are the top 10 holdings for VFIAX:
VFIAX comprises Apple, Microsoft, Alphabet, Amazon, and Tesla and provides exposure to over 500 other stocks.
Admiral Funds Have A Minimum Investment
Vanguard characterizes both VTSAX and VFIAX as admiral funds. One of the benefits of admiral funds is their lower management fee (expense ratio).
The downside is Vanguard admiral funds have a minimum investment threshold.
This minimum used to be $10,000, but recently Vanguard reduced it to $3,000. Once the $3,000 minimum threshold is met, there is no minimum investment.
Investing Tips
Now that we have seen the differences and similarities, we can go into how to use this information to our advantage.
We will do this by taking advantage of these two funds right away.
We can do this by:
- Investing In Equivalent Exchange-Traded Funds (ETFs)
- Buying Fractional Shares
- Starting With Investor Shares
Equivalent Exchange-Traded Funds
VTSAX and VFIAX have equivalent ETFs, and they do not have a minimum investment.
The equivalent ETFs are the same in performance but can differ slightly in expense ratio.
(Video) VTSAX & VBTLX | #1 Investment Duo
Here Are Their Equivalent ETFs:
VTSAX = VTI
VFIAX = VOO
If the minimum investment of $3000 is an obstacle for you, one option is to invest in either Vanguard Total Stock Market ETF (VTI) or .
Buying Fractional Shares
Another way to take full advantage of your investment money is to invest every dollar by purchasing fractional shares of these Exchange-Traded Funds (ETFs).
Typically, if you have $100 to invest and an ETF like VTI costs $150, you would have to wait until you save another $50 to purchase one whole share.
However, recently I’ve discovered you can purchase fractional shares of ETFs with no commissions using M1 Finance. (Use this link for a $50 Bonus)
So now you don’t have to leave your money sitting in your account, earning nothing until you can purchase a total share.
You can immediately invest the money you want and take advantage of any market gains.
This is especially important because missing out on only a few days of market gains can devastate your portfolio’s performance.
Here is what Fidelity found would happen to your portfolio by not being invested in the market on its best days:
If you were incredibly unlucky and missed the best 5 days in 38 years, it would result in a decline of 35% in your portfolio balance!
Since we have no idea when those best days will occur, always staying invested is best.
Time In The Market Beats Timing The Market!
– Ken Fisher
Buying fractional shares allows you to maximize your investment.
This is especially beneficial if you’re interested in investing in higher-priced funds like VOO.
Starting With Investor Shares
There is yet one other option: investing as soon as possible into VTSAX or VFIAX, starting with their investor share funds.
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Investor share funds have no minimum investment threshold, allowing you to start investing immediately.
Equivalent Investor Share Funds
VTSAX = VTSMX
VFIAX = VFINX
These investor-share funds have the same performance because they hold the same stocks.
Their management fee is higher, so converting to an admiral fund is best once you pass the $3,000 minimum.
Related Posts:
- VTSAX vs SPY
- VTIAX vs VTSAX
- VITSX vs VTSAX
Which Is Better VTSAX vs VFIAX?
VTSAX and VFIAX are both excellent investments depending on your investment goals. They are also both Admiral Shares Funds with super-low expense ratios.
However, I would give a slight upper hand to VTSAX.
VTSAX has about 7 times more stocks spread out more evenly. This means VTSAX has more diversification compared to VFIAX.
VTSAX and VFIAX can get you to Financial Independence Retire Early (FIRE).
They both have rock-bottom expense ratios (0.04%). So, either option is an excellent investment for financial independence.
After keeping fees to a minimum, you can work on increasing your savings rate and prioritizing your investments.
Then, you will be well on your way to Financial Independence and Early Retirement!
Calculate Your FI Number With My Free FIRE Calculator
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Disclaimer
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This information is my opinion and is for information purposes only. It is not intended to be investment advice. Seek a duly licensed professional for investment advice.