If you want to invest in a broad range of US stocks and get maximum diversification, VTI is a good choice. It has a lower expense ratio than VOO, and it has historically had a slightly higher return. However, VTI is also more volatile than VOO, so it may not be the best choice if you're risk-averse.
Tax Efficiency and Dividend Yield: Both ETFs offer high tax efficiency, a benefit of their ETF structure. However, their dividend yields differ, with VTI's yield reflecting its broad market scope and VOO's yield mirroring the more stable dividend policies of large-cap companies.
VOO is a proper subset of VTI (it is fully contained within). so is it worth doing 70% VOO, 10% VTI, No. VXF instead of VTI would work better here.
VOO will do well over the long term, but will underperform the market for periods of 5-10 years when small and/or international stocks are favoured. As long as you can hold through such periods of underperformance, VOO is a great option.
Warren Buffett's Berkshire Owns 2 ETFs: SPY and VOO
SPDR S&P 500 ETF Trust SPY. Vanguard S&P 500 ETF VOO.
Currently there's no upside potential for VTI, based on the analysts' average price target. Is VTI a Buy, Sell or Hold? VTI has a consensus rating of Moderate Buy which is based on 2301 buy ratings, 1195 hold ratings and 78 sell ratings.
VTI has a lower expense ratio than QQQ by 0.17%. This can indicate that it's cheaper to invest in VTI than QQQ. VTI targets investing in US Equities, while QQQ targets investing in US Equities.
It does pay a dividend, because it contains blue-chip stocks that are often reliable dividend stocks. All of the Dividend Aristocrats, a set of companies that have raised their dividends at least once a year for at least 25 years, are S&P 500 members, and thus VOO has exposure to all of them.
SPY is more expensive with a Total Expense Ratio (TER) of 0.0945%, versus 0.03% for VOO. SPY is up 28.31% year-to-date (YTD) with +$7.13B in YTD flows. VOO performs better with 28.36% YTD performance, and +$103.99B in YTD flows.
Average Return
In the past year, QQQ returned a total of 25.74%, which is slightly higher than VOO's 24.33% return. Over the past 10 years, QQQ has had annualized average returns of 18.26% , compared to 13.04% for VOO. These numbers are adjusted for stock splits and include dividends.
Minimum investment: VTSAX typically requires a higher minimum investment than VTI. For example, as of April 30, 2023, the minimum investment for VTSAX is $3,000, while the minimum investment for an ETF like VTI is generally the price of one share. Expense ratios: VTI has a lower expense ratio than VTSAX.
How long should I hold an ETF for? You can hold ETFs as long as you want. Allow compound interest to work for you over time. However, you should avoid selling ETFs when the market is down since you can miss out on the potential to gain money when the market recovers.
In general, such funds are appropriate for investors who have a long-term investment horizon (ten years or longer), who are seeking growth in capital as a primary objective, and who are prepared to endure the sharp and sometimes prolonged declines in share prices that occur from time to time in the stock market.
Alternatives to VOO and IVV
A prime competitor worth considering is the SPDR Portfolio S&P 500 ETF (SPLG). It tracks the same S&P 500 index as VOO and IVV but offers a slightly lower expense ratio at 0.02%. Another appealing feature of SPLG is its lower share price, around $64, compared to over $500 for IVV and VOO.
Holding too many ETFs in your portfolio introduces inefficiencies that in the long term will have a detrimental impact on the risk/reward profile of your portfolio. For most personal investors, an optimal number of ETFs to hold would be 5 to 10 across asset classes, geographies, and other characteristics.
Both VOO and FXAIX offer dividend reinvestment with no additional fee or commissions. At the purchase of the fund, both provide an option to select “reinvest” to buy additional shares. This is done automatically and helps compound an investment's growth continually, with virtually no extra effort.
If you prefer a more diversified portfolio, VTI may be a better option, as it includes all VOO's holdings, plus smaller companies. If you're comfortable with the concentration on larger-cap companies or are building a broader portfolio to include other funds, VOO can be a suitable choice.
VTI is less expensive with a Total Expense Ratio (TER) of 0.03%, versus 0.0945% for SPY. VTI is up 27.44% year-to-date (YTD) with +$26.61B in YTD flows. SPY performs better with 28.03% YTD performance, and +$17.08B in YTD flows.
VOO appeals to investors because of its diversification and focus on large-cap equities, which tend to be more stable and have a strong history of profitability compared with smaller, riskier companies. Large-cap stocks dominate the fund, providing exposure to stocks with a blend of stability and growth potential.
VOO has a consensus rating of Moderate Buy which is based on 400 buy ratings, 99 hold ratings and 5 sell ratings. What is VOO's price target? The average price target for VOO is $621.22. This is based on 504 Wall Streets Analysts 12-month price targets, issued in the past 3 months.