VTI vs. ITOT: Which Total Stock Market ETF Is the Better Choice for Investors?

This is a classic “same exposure, different plumbing” setup: the economic edge is not in benchmark choice but in scale, liquidity, and who is forced to care about tracking granularity. The larger fund should continue to win incremental flows from institutions and model portfolios because, at this size, the marginal benefit of deeper small-cap coverage is less important than execution certainty and ecosystem preference.

Second-order, the bigger embedded weights in mega-cap AI leaders mean both vehicles are effectively a wrapper on the same factor trade: long U.S. growth leadership, long passive inflows, and long the buyback/dividend machine of the top 10 names. That concentrates the real risk in the same crowded parts of the market rather than in the nominal number of holdings. If the market de-risks out of AI capex, these funds will likely underperform almost identically; the small difference in breadth will not protect investors.

The contrarian point is that the “broad-market” label can hide a valuation-duration problem. When a handful of names dominate index returns, passive allocations become implicitly a continuation bet on those leaders, not a hedge against them. In a regime where earnings revisions broaden out to industrials, financials, or healthcare, the small weighting differences here won’t matter much, but a rotation away from the mega-cap complex would likely hit both funds before any diversification benefit from the extra 1,000 holdings shows up.