VOO stock vs VTI: which ETF to buy for a bear market
If a bear market is coming, the Motley Fool writer comparing VOO stock and VTI says she is stocking up on the Vanguard Total Stock Market ETF (VTI), not VOO. Both funds share the same tech-heavy top holdings, but VTI’s broader mix leaves a smaller share in those megacaps—about 35% versus nearly 40%—which she sees as a slight diversification edge.
Major U.S. indexes have roared higher over the past three years—the S&P 500 up about 74%, the Nasdaq Composite about 89%, and the Dow about 61%, according to a Motley Fool analysis on Yahoo Finance. Bull markets do not last forever, so the piece asks which Vanguard fund is better to accumulate ahead of the next downturn. More market buzz lives in our Celebrity Breaking News coverage.
Key Takeaways
- The author prefers VTI over VOO stock ahead of a potential bear market for its broader diversification.
- VOO and VTI share the same top 10 tech holdings, but those names make up nearly 40% of VOO versus about 35% of VTI.
- VOO tracks the S&P 500 at a 0.03% expense ratio and remains a top low-cost core fund.
- VTI holds roughly 3,500 U.S. stocks, with about 10%–15% in mid- and small-caps.
- Risk tolerance still matters: VTI may lag when AI megacaps lead the market.
Why does VOO stock lose this bear-market pick?
VOO and VTI both aim to capture a wide swath of U.S. equities, and they list the same top 10 holdings—tech names such as Apple, Microsoft, Nvidia, and Alphabet. The Motley Fool’s Katie Brockman notes those 10 stocks account for nearly 40% of the S&P 500 ETF versus around 35% of the Total Stock Market ETF.
That subtle gap, she argues, could leave VTI slightly less exposed to AI-related volatility if those leaders stumble in a downturn. As the S&P 500 grows more tech-dominated, she says VTI’s extra diversification could give it an edge when the next bear market arrives.
How does VOO stock still stack up as a core holding?
None of that means VOO stock is a weak fund. A separate Motley Fool guide calls the Vanguard S&P 500 ETF the world’s largest ETF by assets, with a 0.03% expense ratio and instant exposure to about 500 of the largest U.S. companies. It cites average annual returns of about 15.5% over the past decade and 20.6% over the past three years.
That same piece notes fewer than 15% of actively managed large-cap funds beat the S&P 500 over the past decade, which is why dollar-cost averaging into low-cost Vanguard index ETFs remains a popular wealth-building approach. Brockman also flags the trade-off: when AI stocks boom, VTI’s lighter megacap tilt can mean underperformance. Recent total returns she cites put the S&P 500 near 311% versus about 294% for the total market.
Is VTI better for long-term beginners, too?
A companion Motley Fool column on AOL recommends VTI as the single Vanguard ETF many 25-year-old beginners need for the next decade. It invests across the investable U.S. market—roughly 3,500 stocks versus about 500 in the S&P 500—and keeps about 10% to 15% in mid- and small-caps, still at a 0.03% expense ratio.
That writer calls VOO a defensible core pick but incomplete because it is large-cap only and concentrated in the top 10 to 12 names, mostly tech. Historically, the piece notes, small caps have outperformed large caps over long stretches even after a decade of large-cap leadership. For investors bracing for a downturn while keeping a simple long-term plan, the sources point the same way: stock up on VTI, while treating VOO stock as the closer large-cap alternative.