VTI vs. VOO: Which Vanguard ETF Will Buy More SpaceX Stock After Its IPO?
Written by Daniel Foelber for The Motley Fool -> S&P Dow Jones Indices just updated its policy on fast-tracking the addition of megacap stocks to the S&P 500. SpaceX won't be added to the S&P 500 for at least a year. The Vanguard S&P 500 ETF is more concentrated than the Vangu
S&P Dow Jones Indices just updated its policy on fast-tracking the addition of megacap stocks to the S&P 500.
The Vanguard S&P 500 ETF is more concentrated than the Vanguard Total Stock Market ETF.
The SpaceX initial public offering (IPO) is set to take place on June 12, with the company raising $75 billion at a valuation of $1.77 trillion . The sheer size of SpaceX has ripple effects through the investing world, from the major indexes to exchange-traded funds (ETFs).
Although SpaceX was initially expected to be fast-tracked for entry into the S&P 500 (SNPINDEX: ^GSPC) , S&P Dow Jones Indices released a press release on June 4 rejecting its earlier proposal. Now, SpaceX and other megacap companies like Anthropic and OpenAI will have to wait at least 12 months after their IPOs to join the S&P 500.
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Here's how the news impacts the two largest ETFs by net assets -- the Vanguard S&P 500 ETF (NYSEMKT: VOO) and the Vanguard Total Stock Market ETF (NYSEMKT: VTI) -- and which one will own more SpaceX after its IPO.
The Vanguard S&P 500 ETF and the Vanguard Total Stock Market ETF have identical 0.03% expense ratios, which is the lowest of any index fund or ETF.
The Vanguard S&P 500 ETF uses the S&P 500 as a benchmark, while the Vanguard Total Stock Market ETF uses the CRSP U.S. Total Market Index . So while the Vanguard S&P 500 ETF has the same holdings as the S&P 500, the Vanguard Total Stock Market ETF has far more holdings -- 3,494 to be exact. However, both ETFs have similar long-term performance because the S&P 500 accounts for the vast majority of the U.S. stock market's value.
