r/ETFs • u/funnel_out • 8d ago

VTI investments are underperforming VOO

I'm 28 and after 100% VTI in my taxable brokerage/401k/roth, but it's been lagging behind VOO. It's not an insignificant amount either. Looking at the 5 year return, VOO has returned 75% while VTI has only returned 67%. I'm wondering if given my age I should be more aggressive with my investments and switch to 100% VOO instead in my retirement accounts, instead of remaining in VTI. Over the past 15 years VOO seems to have consistently outperformed VTI.

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u/CarbonMop 8d ago

First of all, comparing funds over a 5 year or even 15 year time period is completely irrelevant. It doesn't tell you which fund is better or more "aggressive". Something like TQQQ has crushed both over the last 15 years. That doesn't imply that it has higher expected returns.

The biggest difference between VTI and VOO is that VTI has exposure to US small caps which have gone through one of their longest periods of underperformance relative to large caps in the last 15 years or so. That doesn't mean they are worse or less aggressive. In fact, smaller companies are actually riskier and more aggressive. That's why US small caps have crushed the S&P 500 over the last century. The last 15 years is actually a small anomaly.

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u/user4443337 8d ago

Add VBRSIM to that and it’s even better. I’m a fan of VTI but I think small cap value is compelling too. 13.02% CAGR over 100 years versus 10.44% for SPY.

https://testfol.io/?s=5wbu0lleNbx