Is Vanguard S&P 500 ETF a good investment?
The Vanguard S&P 500 ETF (VOO -1.36%) is a top choice for most index fund investors. Even Warren Buffett recommends it above any other investment. There's a good reason for that. Its low expense ratio and tight index tracking make it a top choice for anyone looking to match the returns of the S&P 500.
| ETF | Ticker | Annualized 5-year return |
|---|---|---|
| iShares Core S&P 500 ETF | IVV | 15.65% |
| Vanguard S&P 500 ETF | VOO | 14.72% |
| SPDR S&P 500 ETF Trust | SPY | 14.60% |
Investing in an S&P 500 fund can instantly diversify your portfolio and is generally considered less risky. S&P 500 index funds or ETFs will track the performance of the S&P 500, which means when the S&P 500 does well, your investment will, too. (The opposite is also true, of course.)
In the last 30 Years, the Vanguard S&P 500 (VOO) ETF obtained a 10.55% compound annual return, with a 15.09% standard deviation.
For long-term, buy-and-hold investors, opting for a diversified mutual fund or exchange-traded fund (ETF) presents a far wiser strategy than picking individual stocks. These funds can spread risk across various sectors, countries and asset classes, helping to reduce volatility.
Invests in stocks in the S&P 500 Index, representing 500 of the largest U.S. companies. Goal is to closely track the index's return, which is considered a gauge of overall U.S. stock returns. Offers high potential for investment growth; share value rises and falls more sharply than that of funds holding bonds.
The goal of the Vanguard S&P 500 ETF is to track the returns of the S&P 500 index. VOO appeals to investors because it's well-diversified and is made up of equities of large corporations—called large-cap stocks.
According to our calculations, a $1000 investment made in February 2014 would be worth $5,971.20, or a gain of 497.12%, as of February 5, 2024, and this return excludes dividends but includes price increases. Compare this to the S&P 500's rally of 178.17% and gold's return of 55.50% over the same time frame.
ETFs are subject to market fluctuation and the risks of their underlying investments. ETFs are subject to management fees and other expenses. Unlike mutual funds, ETF shares are bought and sold at market price, which may be higher or lower than their NAV, and are not individually redeemed from the fund.
For most individual investors, ETFs represent an ideal type of asset with which to build a diversified portfolio. In addition, ETFs tend to have much lower expense ratios compared to actively managed funds, can be more tax-efficient, and offer the option to immediately reinvest dividends.
How much do I need to invest in Vanguard S&P 500?
How much does it cost to buy Vanguard index fund shares? Investors make an initial minimum investment — typically around $3,000 — and pay annual costs to maintain the fund, known as an expense ratio, based on a small percentage of your cash invested in the fund.
Dividend Summary
There are typically 4 dividends per year (excluding specials), and the dividend cover is approximately 1.0.
Experts agree that for most personal investors, a portfolio comprising 5 to 10 ETFs is perfect in terms of diversification. But the number of ETFs is not what you should be looking at. Rather, you should consider the number of different sources of risk you are getting with those ETFs.
Holding an ETF for longer than a year may get you a more favorable capital gains tax rate when you sell your investment.
Vanguard's unique cost structure, the economies of scale it has achieved, and the total number of assets under management (AUM) allow it to offer its ETFs at the lowest cost available in the market. We've listed 10 of the firm's cheapest ETFs by their expense ratio.
- Vanguard S&P 500 ETF (VOO).
- Vanguard Total Stock Market ETF (VTI).
- Vanguard Total Bond Market ETF (BND).
- Vanguard Total International Stock ETF (VXUS).
- Vanguard FTSE All-World Ex-U.S. ETF (VEU).
- Vanguard Total World Stock ETF (VT).
Several ETFs aim to replicate the S&P 500, but some of the most popular ones are the SPDR S&P 500 ETF Trust (NYSEMKT: SPY), the SPDR Portfolio S&P 500 ETF (NYSEMKT: SPLG), the iShares Core S&P 500 ETF (NYSEMKT: IVV), and the Vanguard 500 Index Fund (NYSEMKT: VOO).
You can invest in the S&P 500 index by purchasing shares of a mutual fund or exchange-traded fund (ETF) that passively tracks the index. These investment vehicles own all the stocks in the S&P 500 index in proportional weights.
- ProShares Bitcoin Strategy ETF (BITO)
- Invesco QQQ Trust (QQQ)
- Vanguard Information Technology ETF (VGT)
- VanEck Semiconductor ETF (SMH)
- Invesco S&P MidCap Momentum ETF (XMMO)
- SPDR S&P Homebuilders ETF (XHB)
- Invesco S&P 500 GARP ETF (SPGP)
Both the Vanguard S&P 500 Index Fund and the SPDR S&P 500 ETF track the performance of the S&P 500 index, which represents a broad selection of large-cap U.S. stocks. The key difference lies in their structure: the Vanguard fund is a mutual fund, while the SPDR ETF is an exchange-traded fund.
Which ETF has the best 10 year return?
| Symbol | ETF Name | 10y Chg 4-2-24 |
|---|---|---|
| PSI | Invesco Semiconductors ETF | 786% |
| META | Roundhill Ball Metaverse ETF | 717% |
| XSD | SPDR S&P Semiconductor ETF | 617% |
| XLK | SPDR Technology Sector ETF | 558% |
Vanguard S&P 500 ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, VOO is a great option for investors seeking exposure to the Style Box - Large Cap Blend segment of the market.
The result is the number of years, approximately, it'll take for your money to double. For example, if an investment scheme promises an 8% annual compounded rate of return, it will take approximately nine years (72 / 8 = 9) to double the invested money.
If you invest $10,000 today at 10% interest, how much will you have in 10 years? Summary: The future value of the investment of $10000 after 10 years at 10% will be $ 25940.
Does the S&P 500 Pay Dividends? The S&P 500 is an index, so it does not pay dividends; however, there are mutual funds and exchange-traded funds (ETFs) that track the index, which you can invest in. If the companies in these funds pay dividends, you'll receive yours based on how many shares of the funds you hold.
