Short answer: An S&P 500 index fund holds about 500 large U.S. companies; a total stock market fund holds those plus thousands of smaller ones, about seven times as many companies in all. At the largest fund companies, the two cost the same or nearly the same (0.015% to 0.04% a year, according to their prospectuses), and because the biggest companies dominate both, their long-term returns have been close.
If you’re building a portfolio around a U.S. stock index fund, you’ll quickly face a choice between two kinds: funds that track the S&P 500 and funds that track the entire U.S. stock market. In our count of U.S. index funds, the two largest are a total market fund and an S&P 500 fund. They often cost exactly the same, and they own many of the same companies.
So how different are they really? This guide compares them using the funds’ own filings: what they hold, what they cost, how they’ve performed, and what that means for choosing one.
The short version: a total market fund holds about seven times as many companies, but the 500 largest make up most of its value either way. Over the 10 years to the end of 2025, the S&P 500 came out ahead, by about half a percentage point a year.
What each one holds
An S&P 500 index fund holds the roughly 500 large U.S. companies in the S&P 500. According to S&P Dow Jones Indices, the index “includes 500 leading companies and covers approximately 80% of available market capitalization” (S&P Dow Jones Indices).
A total stock market index fund holds nearly every publicly traded U.S. company: large, mid-sized, small and very small. Vanguard’s prospectus describes its fund’s index as one that “represents 100% of the investable U.S. stock market” and “includes large-, mid-, small-, and micro-cap stocks” (Vanguard prospectus).
Here’s how two of the most popular ETFs compare, from Vanguard’s fact sheets as of June 30, 2026:
| Vanguard S&P 500 ETF (VOO) | Vanguard Total Stock Market ETF (VTI) | |
|---|---|---|
| Index | S&P 500 | CRSP US Total Market (now the Morningstar US Total Market Index) |
| Number of stocks | 506 | 3,531 |
| Top 10 holdings, share of assets | 37.9% | 33.4% |
| Expense ratio | 0.03% | 0.03% |
Sources: Vanguard fact sheets for VOO and VTI.
One naming note: in July 2026, after Morningstar announced its acquisition of the index provider CRSP, Vanguard renamed the fund. A supplement to its prospectus states that “the name changes are effective as of July 29, 2026” and that each fund’s “investment objective, strategies, and polices remain unchanged.” The fund is now the Vanguard Morningstar Total Stock Market Index Fund, and its ETF is the Vanguard Morningstar Total Stock Market ETF; the ticker VTI didn’t change (Vanguard supplement).
Why they’re more alike than they look
Both funds weight companies by their market value. That means the biggest companies dominate both. Because the S&P 500 covers about 80% of the market’s value, roughly four-fifths of a total market fund is invested in the same large companies an S&P 500 fund holds, and in similar proportions.
The top 10 holdings show it. In both funds, the list is the same: NVIDIA, Apple, Alphabet, Microsoft, Amazon, Broadcom, Micron, Meta, Tesla and Eli Lilly. They just weigh a little less in the total market fund (33.4% of assets) than in the S&P 500 fund (37.9%), because the total market fund spreads the rest across about 3,000 more companies.
The real difference is the remaining fifth or so: mid-sized and small companies that aren’t in the S&P 500.
What they cost
At the biggest fund companies, the two cost the same or nearly the same:
| Fund | Expense ratio |
|---|---|
| Vanguard S&P 500 ETF (VOO) | 0.03% |
| Vanguard Total Stock Market ETF (VTI) | 0.03% |
| Vanguard 500 Index Fund Admiral Shares (VFIAX) | 0.04% |
| Vanguard Total Stock Market Index Fund Admiral Shares (VTSAX) | 0.04% |
| Fidelity 500 Index Fund (FXAIX) | 0.015% |
| Fidelity Total Market Index Fund (FSKAX) | 0.015% |
From each fund’s latest prospectus or fact sheet. Vanguard’s Total Stock Market Index Fund Admiral Shares were renamed in July 2026 like the ETF; the 500 Index Fund was not.
Cost isn’t a reason to pick one over the other at these companies. It can be a reason to avoid a particular fund, though: as we found in our analysis of what S&P 500 index funds really charge, some funds tracking the same index cost many times more. Check the expense ratio of the specific fund and share class you’re offered.
Fidelity’s total market fund also tracks a different index: its prospectus says it invests in stocks “included in the Dow Jones U.S. Total Stock Market Index” (Fidelity prospectus). Different total market indexes cover almost the same companies, so the results are very close, as the table below shows.
How they’ve performed
These are the average annual returns reported in each fund’s prospectus, for periods ending December 31, 2025:
| 1 year | 5 years | 10 years | |
|---|---|---|---|
| S&P 500 index | 17.88% | 14.42% | 14.82% |
| Vanguard 500 Index Fund Admiral Shares | 17.83% | 14.38% | 14.78% |
| CRSP US Total Market Index | 17.15% | 13.08% | 14.25% |
| Vanguard Total Stock Market Index Fund Admiral Shares | 17.12% | 13.06% | 14.24% |
| Dow Jones U.S. Total Stock Market Index | 17.05% | 13.07% | 14.21% |
| Fidelity Total Market Index Fund | 17.05% | 13.09% | 14.23% |
Returns before taxes, from the funds’ summary prospectuses dated April 2026 on SEC EDGAR. Index returns don’t include any fees.
Over the past decade, the S&P 500 did better. On $10,000 invested for 10 years, the difference between 14.78% and 14.24% a year adds up to about $39,700 versus about $37,900.
The reason is simple: the largest U.S. companies, especially a handful of technology giants, outperformed smaller companies over that period. A total market fund, which holds those smaller companies too, lagged a little as a result.
That hasn’t always been the case, and it won’t necessarily continue. Vanguard’s prospectus notes that “historically small- and mid-cap stocks have typically been more volatile,” and there have been long stretches when they did better than large companies, and long stretches when they did worse. No one knows in advance which kind of decade comes next. In 2026 so far, according to S&P Dow Jones Indices’ own index data, small-company stocks have been ahead of the S&P 500 (S&P Dow Jones Indices).
Notice also how closely each fund follows its index: within a few hundredths of a percentage point a year. Our article on tracking difference explains why that gap exists.
Which one should you choose?
For most long-term investors, both are excellent choices, and the difference between them is small compared with the decisions that matter more: investing regularly, keeping costs low and staying invested.
A total market fund may suit you if:
- You want to own the whole U.S. market and not leave out smaller companies.
- You don’t want to bet on large companies continuing to lead.
- You prefer a single fund for all your U.S. stocks, as in the three-fund portfolio.
An S&P 500 fund may suit you if:
- It’s the cheapest or only broad option in your 401(k).
- You’re comfortable focusing on large, established companies.
- You already hold small and mid-sized companies somewhere else.
What not to do: holding both doesn’t add much diversification. Because the two overlap so heavily, owning an S&P 500 fund and a total market fund together mostly gives you more of the same large companies.
Common questions
Is a total market fund riskier? Slightly, in theory, because it includes small companies that tend to swing more. In practice, small companies are such a small slice of the fund’s value that it moves almost exactly like the S&P 500.
Which one is more diversified? The total market fund holds more companies, so it’s more diversified by number. By weight, both are dominated by the same large companies.
Can I switch from one to the other? In a retirement account, yes, without tax consequences. In a taxable account, selling to switch can trigger capital gains taxes, which can easily outweigh any small advantage. Our guide to capital gains distributions covers the tax side.
Why does VOO hold more than 500 stocks? The S&P 500 itself has slightly more than 500 stocks, because some companies have more than one class of shares in the index, such as Alphabet’s Class A and Class C shares. The fund’s count can also differ slightly from the index’s on any given date.
The bottom line
A total market fund and an S&P 500 fund are close cousins. They share the same largest companies, often cost the same, and have delivered similar long-term results, with the S&P 500 ahead over the past decade because large companies led. The total market fund adds thousands of smaller companies for a little more breadth. Either is a sound core holding; picking one and sticking with it matters far more than which one you pick.
This article is general information based on public filings, not personal investment advice. Past performance doesn’t guarantee future results. See our Financial Disclaimer.
Sources
- S&P Dow Jones Indices, S&P 500 and U.S. dashboard.
- Vanguard fact sheets as of June 30, 2026: VOO and VTI.
- Vanguard summary prospectuses dated April 28, 2026: Total Stock Market Index Fund and 500 Index Fund; prospectus supplement on the name changes (July 29, 2026).
- Fidelity summary prospectuses dated April 29, 2026: Fidelity Total Market Index Fund and Fidelity 500 Index Fund.
- The $10,000 example is our own calculation using the 10-year returns above.
Sources checked on October 1, 2026.