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.
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.
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.
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.
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.
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.
SPY has an expense ratio of 0.09%, which, while low, is still higher than that of VOO,'s 0.03%, one of the lowest expense ratios for S&P 500 ETFs. This makes VOO more cost-effective for long-term investors, as expense ratio differences compound over time and impact returns.
And Buffett knows it, too, as SPDR S&P 500 ETF Trust is one of Berkshire Hathaway's own holdings. "Buffett was a believer in investing in S&P 500 funds for their simplicity and low costs," said Todd Rosenbluth, head of research at TMX VettaFi.
Endorsement from prestigious investors: VOO is backed by renowned investors such as Warren Buffett, who has even recommended it in his will. Hedge fund Citadel, led by Ken Griffin, also holds a significant position in VOO, and increased its stake by 277% in third-quarter 2024.
VOO 12 Month Forecast
Based on 504 Wall Street analysts offering 12 month price targets to VOO holdings in the last 3 months. The average price target is $621.22 with a high forecast of $730.43 and a low forecast of $503.20. The average price target represents a 16.36% change from the last price of $533.89.
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&P 500 ETF (VOO) last dividend payment was $1.74 per share and was paid on 26 Dec 2024.
VOO is less expensive with a Total Expense Ratio (TER) of 0.03%, versus 0.06% for SCHD. VOO is up 27.79% year-to-date (YTD) with +$105.04B in YTD flows. SCHD performs worse with 19.19% YTD performance, and +$6.90B in YTD flows.
VOO & QQQ are currently very tech heavy however VOO is pegged to the S&P500 that's why their top holdings could change. With the AI revolution, investing in tech stocks continues to be popular.
NYSEMKT: VOO
These three Vanguard ETFs offer robust dividend growth and the potential for lifelong passive income. Generating passive income is a cornerstone of financial independence.
For most investors, it probably doesn't make sense to own both. VTI and VOO both provide great diversification at a low cost. If you hold both in your portfolio, you'll have a lot of overlap between the two. However, you may find that your retirement plan at work doesn't offer a total stock market index fund like VTI.