Vanguard Total Stock Market Index Fund Institutional (VITSX)

Vanguard Institutional Index Funds Institutional (VINIX)

Im trying to choose which large blend fund to go with in the long term and I have the above two options for my retirement account. My choice will make up 50-60% of my portfolio.

Is one a better option than the other? Which one would you go with and why? Im assuming not both due to overlap.

Both are categorized as Large Blend. Both have .04% expense ratios. 10 year performance: VITSX=7.17% and VINIX=7.01%

The biggest difference I see is VITSX holds 3650 stocks and VINIX holds 507 stocks.

VITSX seems to be what I hear as a great choice for Large Blend all the time. Is there any reason to go with VINIX instead?

VINIX tracks the SP500 index which is the top 500 large cap US stocks weighted in proportion to market cap.

The VITSX tracks the total US stock market weighted in proportion to market cap. So even though the VITSX holds more stocks it is still heavily weight toward the top 500 that are in VINIX. The other stocks are mid-cap and small-cap in proportion to their smaller caps.

Both funds are going to track very closely to each other. You would expect the VITSX to have better diversification and perhaps slightly better performance due to the inclusion of mid and small cap stocks but they are really a small proportion of the fund so the difference is not great.

The expense ratios are the same, the dividend yields are essentially the same, both will be very highly correlated to the overall US stock market. Id say they are both essentially the same investment. Personally, for many years I used SP500 index funds as the core stock holding in my accounts, but in recent years Ive moved to total market index funds if the expenses are the same or less.

Do you intend on owning small/midcap US stocks?

Do you think the the total stock market or the 500 largest public companies in the US who do better over the long term?

The small/midcap question is based on the difference between the 2 funds. VITSX is 75% made up of the funds in VINIX. Because if has the whole market, there are less expenses related to companies changing sizes. This means if its cheaper to hold VITSX than VINIX AND a small cap index.

The other question is just based on economic cycles. At different points in history, small US stocks have outperformed larger ones. VITSX will do slightly better in these cycles but slightly worse when the biggest companies do best.

Overall, they are both fantastic funds that will perform similarly, so it is mostly a preference pick.

I considered also investing a % into VIEIX to get exposure to small and mid cap but I didnt realize VITSX also includes mid and small (albeit small proportions it sounds). Based on your response though now Im thinking VITSX at 65%, VTSNX 20%, VBTIX 15%. As much as Im tempted not to go international at all. Would it be worth it to still add VIEIX to the mix?

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