Wall Street's Laziest Fund Is Outperforming Against SPY - Time to Switch to VTI?

VTI is a low-cost ETF that tracks the CRSP US Total Market Index, holding about 3,700 investable US stocks. SPY tracks the S&P 500 and holds the 500 largest US companies by market cap. Both funds are cap-weighted, so their largest holdings overlap heavily, with major technology companies dominating both. The key difference is the tail: VTI includes mid caps, small caps, and micro caps that SPY does not. This causes performance to diverge when smaller companies outperform or underperform. VTI’s 2026 outperformance is narrow, while one-year results are nearly tied. Over longer periods, SPY has higher total returns, including dividends reinvested.

"The pitch for Vanguard Total Stock Market Index Fund ETF ( NYSEARCA:VTI | VTI Price Prediction) has always been embarrassingly simple: own every public US stock that matters, charge almost nothing, and wait. That is it. The fund holds no tactical tilts, factor overlays, or managers trying to time the rotation out of tech. Which is why it is mildly funny that VTI has edged past SPDR S&P 500 ETF ( NYSEARCA:SPY) so far in 2026, with VTI up about 10.2% year to date against SPY's 10.1%. A rounding error, sure. But for a fund whose entire identity is doing less, even a hair of outperformance against the most famous index ETF on earth feels like vindication for the laziest strategy on Wall Street."

"VTI tracks the CRSP US Total Market Index, which is roughly 3,700 stocks covering essentially every investable US company. SPY tracks the S&P 500, the 500 largest by market cap. The overlap at the top is nearly identical because both are cap-weighted, so NVIDIA, Apple, and Microsoft dominate either one. The difference lives in the tail: VTI owns the mid caps, small caps, and micro caps that SPY ignores, which is the entire reason the two funds drift apart over time."

"SPY's concentration is striking up close. The top three holdings, Nvidia ( NASDAQ:NVDA), Apple ( NASDAQ:AAPL), and Microsoft ( NASDAQ:MSFT), combine for 19% of the fund, and information technology alone accounts for 35% of sector weight. VTI carries slightly lower mega-cap exposure and shifts the difference across thousands of smaller names. So when small caps rally, VTI catches a tailwind SPY misses. When mega-cap tech leads, the two move in lockstep."

"VTI's recent edge is real but narrow, and it reverses over longer windows. One-year returns are essentially tied at roughly 29% for VTI versus 29% for SPY. Stretch the window and SPY pulls ahead: over five years VTI returned 83% while SPY returned 92%, dividends reinvested. Over ten years the gap is 307% for"

Read at 24/7 Wall St.