Build Funds Compared: VOO vs VTI vs SPY

Side-by-side comparison

Verify current data with fund sponsors. Numbers change daily.

The key takeaway

VOO and SPY track the same index (S&P 500) but VOO is three times cheaper at 0.03% vs SPY's 0.09%. VTI tracks a broader total market index that includes small and mid-cap stocks in addition to large caps. The performance difference between VOO/SPY and VTI is small — roughly 0.5% annually over the past 5 years in favor of VOO/SPY — because large-cap stocks have dominated US market returns.

The meaningful difference is cost. VOO and VTI at 0.03% are among the cheapest ETFs in the world. SPY at 0.09% is three times more expensive for the same underlying exposure. On a $100,000 position over 20 years, that 0.06% difference compounds to roughly $1,500 in favor of VOO or VTI.

VOO — The S&P 500 default

Vanguard S&P 500 ETF (VOO) is the Build slot's default recommendation for most investors. It tracks the S&P 500 — 503 of the largest US companies by market cap — at just 0.03% per year. With over $1.5 trillion in assets, it's one of the largest ETFs in the world.

The S&P 500 is the most widely followed equity index in the world, and VOO gives you exposure to it at rock-bottom cost. The fund's quarterly distributions match the S&P 500's dividend yield of ~1.3%. For Five Fund Frame investors, VOO is the natural Build pick because it's simple, cheap, and from Vanguard — a sponsor you likely already use for your Park (SGOV) and Earn (SCHD) slots.

VTI — The total market alternative

Vanguard Total Stock Market ETF (VTI) does everything VOO does but adds small and mid-cap stocks. It holds ~4,000 US stocks across the entire market cap spectrum, compared to VOO's 503 large-cap holdings. The expense ratio is identical at 0.03%.

The question is whether the additional diversification matters. Over the past 20 years, large-cap stocks (which VOO captures) have outperformed small and mid-caps by roughly 0.5% annually. But this is a short measurement window in market terms, and small caps have significantly outperformed in other periods. VTI's broader exposure means slightly more diversification but also slightly lower returns during large-cap-dominated periods.

SPY — The original

SPDR S&P 500 ETF Trust (SPY) is the original S&P 500 ETF and remains the most traded ETF in the world by volume. It tracks the same index as VOO but charges 0.09% — three times more than VOO's 0.03%. With over $550 billion in assets, it has massive liquidity and tight bid-ask spreads.

The only reason to choose SPY over VOO is if you're already in the SPDR ecosystem or need SPY's specific options chain for advanced strategies. For buy-and-hold Five Fund Frame investors, there is no reason to pay three times more for the same underlying exposure. VOO does the exact same thing at a third of the cost.

Who should use what

The honest answer: VOO is the best Build slot pick for virtually every investor. SPY charges three times more for identical exposure. VTI is a fine alternative if you want total market coverage, but the large-cap focus of VOO has delivered better returns and aligns with the Five Fund Frame's philosophy of simplicity.