Which ETF is best for S&P 500?
In the trailing five-, 10-, 15-, and 20-year periods, the Vanguard Growth ETF (VUG 0.09%) has outperformed the S&P 500. That is a remarkable track record. And it's a long-enough time horizon to have confidence that this streak can continue in the years ahead.
- Expense Ratios. Both passively managed and active ETFs exist—but most S&P 500 ETFs are passively managed by definition. ...
- Liquidity. ...
- Inception Date. ...
- Share Price and Investment Minimums. ...
- Dividend Yield.
In the trailing five-, 10-, 15-, and 20-year periods, the Vanguard Growth ETF (VUG 0.09%) has outperformed the S&P 500. That is a remarkable track record. And it's a long-enough time horizon to have confidence that this streak can continue in the years ahead.
The Vanguard S&P 500 ETF (VOO -0.26%) 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.
| TICKER | EXPENSE RATIO | TOTAL ASSETS |
|---|---|---|
| IVV | 0.03% | $449.9 billion |
| VOO | 0.03% | $419.9 billion |
| SPLG | 0.02% | $32.4 billion |
| RSP | 0.20% | $50.9 billion |
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.
Summary. Investing in the S&P 500 index fund, such as VOO, is a winning long-term strategy. Historical data shows that the market has consistently gone higher despite obstacles and downturns.
The one time it's okay to choose a single investment
That's because your investment gives you access to the broad stock market. Meanwhile, if you only invest in S&P 500 ETFs, you won't beat the broad market. Rather, you can expect your portfolio's performance to be in line with that of the broad market.
| Fund (ticker) | 5-year annual returns | Expense ratio |
|---|---|---|
| Fidelity ZERO Large Cap Index (FNILX) | 15.3% | 0% |
| Vanguard S&P 500 ETF (VOO) | 15.2% | 0.03% |
| SPDR S&P 500 ETF Trust (SPY) | 15.2% | 0.095% |
| iShares Core S&P 500 ETF (IVV) | 15.2% | 0.03% |
| Symbol | Name | 5-Year Return |
|---|---|---|
| PSI | Invesco Semiconductors ETF | 25.83% |
| XHB | SPDR S&P Homebuilders ETF | 24.65% |
| XLK | Technology Select Sector SPDR Fund | 24.06% |
| IYW | iShares U.S. Technology ETF | 23.54% |
Should I invest in both VOO and VTI?
If you only want to own the biggest and safest companies, choose VOO. If you want broader exposure and more diversification, choose VTI. Or, you could also invest in both, for example, by putting half in VOO and half in VTI.
| FUND (TICKER) | EXPENSE RATIO | 10-YEAR RETURN AS OF MARCH 1 |
|---|---|---|
| Vanguard S&P 500 ETF (VOO) | 0.03% | 11.99% |
| Vanguard Total Stock Market ETF (VTI) | 0.03% | 11.43% |
| Vanguard Total Bond Market ETF (BND) | 0.03% | 1.77% |
| Vanguard Total International Stock ETF (VXUS) | 0.08% | 4.07% |
Investors can buy and sell Vanguard mutual funds and ETFs through any number of brokerage firms and financial advisors. If you buy directly through Vanguard, you may benefit from lower fees, better customer service, and additional product research.
Another option is a low-cost S&P 500 mutual fund or ETF, both of which mirror the index and typically carry less risk than investing in individual stocks. An S&P 500 fund or ETF tries to replicate the performance of the index by investing in listed companies and working to match the index's performance.
While the two ETFs follow the same strategy, they earn different ratings. VOO earns a top rating of Gold, while SPY earns the next best rating of Silver. Almahasneh says the reason is fees. VOO charges 0.03%, while SPY charges 0.09%.
The largest S&P 500 ETF is the SPDR S&P 500 ETF Trust (SPY).
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.
ETFs can be a great investment for long-term investors and those with shorter-term time horizons. They can be especially valuable to beginning investors. That's because they won't require the time, effort, and experience needed to research individual stocks.
Based on our forecasts, a long-term increase is expected, the "VOO" fund price prognosis for 2028-03-01 is 551.296 USD. With a 5-year investment, the revenue is expected to be around +53.15%. Your current $100 investment may be up to $153.15 in 2028.
| S&P 500 ETF | 1-yr | 10yr |
|---|---|---|
| Returns before taxes | 26.33% | 12.00% |
| Returns after taxes on distributions | 25.85% | 11.51% |
| Returns after taxes on distributions and sale of fund shares | 15.87% | 9.85% |
| Average Large Blend Fund | ||
Does VOO stock pay dividends?
VOO has a dividend yield of 1.34% and paid $6.41 per share in the past year. The dividend is paid every three months and the last ex-dividend date was Mar 22, 2024.
Is Investing in the S&P 500 Less Risky Than Buying a Single Stock? Generally, yes. The S&P 500 is considered well-diversified by sector, which means it includes stocks in all major areas, including technology and consumer discretionary—meaning declines in some sectors may be offset by gains in other sectors.
You only need one S&P 500 ETF
You could be tempted to buy all three ETFs, but just one will do the trick. You won't get any additional diversification benefits (meaning the mix of various assets) because all three funds track the same 500 companies.
In fact, a number of billionaire investors count S&P 500 index funds among their top holdings. Among those are Buffett's Berkshire Hathaway, Dalio's Bridgewater, and Griffin's Citadel.
Have You Missed the Best Time to Invest? We're only a few months into 2024, but the S&P 500 (SNPINDEX: ^GSPC) has started off the year with a bang. The index is currently up by more than 8% this year alone and it's soared by a whopping 44% from its lowest point in October 2022.
