Key Points
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The Vanguard S&P 500 ETF (NYSEMKT: VOO), launched on September 7, 2010, has yielded an annual return of approximately 14.7%.
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The fund charges a low expense ratio of 0.03%, equating to about $3 annually on a $10,000 investment.
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As of June 30, 2024, nearly 90% of actively managed large-cap U.S. equity funds underperformed the S&P 500 over the previous 15 years.
The Vanguard S&P 500 ETF has grown to manage nearly $980 billion, making it one of the world’s largest funds. Its strategy is to track the S&P 500 index by investing in the same companies proportionately and adjusting as the index changes. Since its inception, an initial $10,000 investment would have increased to around $88,000 today.
Over a 15-year span, about 89.5% of actively managed funds failed to outperform the S&P 500, highlighting the relative advantage of using a passive investment approach like Vanguard’s ETF. However, the fund’s concentration in its top holdings, which accounted for approximately 36% of assets as of mid-2024, poses risks in case of a downturn in these companies.
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