Why not XLG? Why VTI?

If you have followed along I have announced that I have started to build my own portfolio and my first choice was to go with Rydex Russell Top 50 (XLG). The money hasn't been deposited yet and I have changed my mind.

Why you ask? I like XLG, there is nothing wrong with the fund. It has an expense ratio of .2%, when most EFT funds have expense ratios of .53%. But I really don't want so much holdings in just 50 stocks. Mega caps have underperformed their small cap counterparts the last few years and I am enticed because with recent market turbulence I like the idea of mega cap companies. But if I'm wrong, I could be missing out on some good returns.

And I would rather have my risk spread out more than just through the top 50. Most index following EFT's hold most the same stocks, in just much smaller proportions. I have instead decided to go with Vanguard Total Stock Market EFT (VTI). You can see here that it holds Exxon, Bank of American, Proctor & gamble just like XLG but in much smaller percentages. Exxon is the top holding for both funds but exposure to the company is over 7% in the XLG EFT compared to just 2.74% in VTI.

Here is the EFT investment policy:

The Fund seeks to track the performance of a benchmark index that measures the investment return of the overall stock market. The Fund employs a "passive management" approach designed to track the performance of the MSCI US Broad Market Index.

I'm more comfortable with this fund that it is not subject to the volatility of individual stocks as XJG would be. I want to invest and not have to worry. Now as I continue to build I need to be mindful of not having overlap or at least avoid it as much as possible with other investments such as EFT or mutual funds that I purchase in the future.