The money invested in #ETFs has gone up by 3,000% since 2003. As of 2020, there are around 7,000 ETFs out there, which makes picking the right #ETF difficult for beginners.

One of the questions that come up all the time is: What is the best ETF to buy?

Two of the most popular ETFs out there are the Vanguard S&P 500 ETF, ticker symbol #VOO and the Vanguard Total Stock Market ETF, ticker symbol #VTI . The VOO tracks the S&P 500 index whilst the VTI tracks the total US stock market.

When you select an ETF for your investment portfolio, there are some key characteristics of an ETF that you should be looking at, such as the clear objective of an ETF, the total expense ratio (also known as ongoing charges figure), the fund size, the number of companies an ETF invests in, the weight of the top 10 holdings, its long-term performance and how an ETF treats dividends.

The total expense ratio measures the ETF provider’s total cost of running a fund. Total costs may include fees like management fees, trading fees, legal fees and auditor fees. The total expense ratio is calculated by dividing the total annual cost by the fund's total assets averaged over that year.

A large fund size of an ETF is important because it shows you how liquid a fund is - so if there are a lot of people that trade that ETF. If an ETF has a small fund size, then it’s less liquid - so that not a lot of people are trading this ETF on a daily basis. If you want to sell a less liquid ETF, you could run into a situation where there won’t be a lot of investors that want to buy that ETF from you - which could bring down your selling price massively.

The number of companies or countries an ETF invests in indicates how diversified an ETF is.

Which one of the two ETFs is better in terms of investment goal, costs, liquidity, composition, performance and dividends? In this video, we will compare the VOO and the VTI in each of these categories to see who the winner is. Enjoy!

⏰⏰ Timecodes ⏰⏰
0:00 Intro
1:04 ETFs Explained
1:45 Investment Goal
3:57 Costs
4:42 Fund Size
5:33 Composition
7:25 Performance
8:29 Dividends
9:57 Which One Is Better?

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DISCLAIMER: This video is for educational purposes only and merely cites my own personal opinion. In order to make the best financial decision that suits your own needs, you must conduct your own thorough research and seek the advice of a licensed financial advisor if necessary.

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