Vanguard S&P 500 ETF (2024)

FAQs

Is Vanguard S&P 500 ETF a good investment? ›

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.

Legendary investor Warren Buffet once said that all it takes to make money as an investor is to 'consistently buy an S&P 500 low-cost index fund. ' And academic research tends to agree that the S&P 500 is a good investment in the long term, despite occasional drawdowns.

The S&P 500 is a great core holding, however, it lacks several dimensions of an optimally diversified portfolio i.e. the sector, geographic, currency and cap size.

Say you invest $1,000 and earn an annualized return of 4%. A year later, your investment would have grown to $1,040 which is your original $1,000 investment plus four percent. In year two, you'd earn 4% on the entire total, not just the principal balance of $1,000. By the end of the year, you'd have $1,081.60.

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 the last 30 Years, the Vanguard S&P 500 (VOO) ETF obtained a 9.73% compound annual return, with a 14.96% standard deviation. In 2022, the ETF granted a 1.37% dividend yield.

The same $10,000 invested in the S&P 500 would be worth just $7,520 now.

Over the years, that money can really add up: If you kept that money in a retirement account over 30 years and earned that average 6% return, for example, your $10,000 would grow to more than $57,000. In reality, investment returns will vary year to year and even day to day.

Comparison to S&P 500 Index

To help put this inflation into perspective, if we had invested $8,000 in the S&P 500 index in 1980, our investment would be nominally worth approximately $912,320.82 in 2023. This is a return on investment of 11,304.01%, with an absolute return of $904,320.82 on top of the original $8,000.

Investing only in the S&P 500 does not provide the broad diversification that minimizes risk. Economic downturns and bear markets can still deliver large losses. The past performance of the S&P 500 is not a guarantee of future performance (yeap, and we'll get back to that!)

How much of your portfolio should be in S&P 500? ›

But the 5% rule can be broken if the investor is not aware of the fund's holdings. For example, a mutual fund investor can easily pass the 5% rule by investing in one of the best S&P 500 Index funds, because the total number of holdings is at least 500 stocks, each representing 1% or less of the fund's portfolio.

As you can see from the chart, investing $5,000 annually in the S&P 500 would make you a millionaire in a little over 30 years, assuming average 10.25% annual returns.

If you invested $100 in the S&P 500 at the beginning of 1930, you would have about $590,042.12 at the end of 2023, assuming you reinvested all dividends. This is a return on investment of 589,942.12%, or 9.74% per year.

Brenda O'Connor, senior vice president and financial advisor at UBS joins BNN Bloomberg to talk about the market rally and where we can go from here.

S&P 500: $100 in 1980 → $11,404.01 in 2023

This is a return on investment of 11,304.01%, or 11.53% per year. This lump-sum investment beats inflation during this period for an inflation-adjusted return of about 2,989.80% cumulatively, or 8.22% per year.

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.

ETFs can provide an easy way to be diversified and as such, the investor may want to have 75% or more of the portfolio in ETFs." To that end, Conzo says a more sophisticated investor may have additional needs.

Holding period:

If you hold ETF shares for one year or less, then gain is short-term capital gain. If you hold ETF shares for more than one year, then gain is long-term capital gain.

Basic Info. S&P 500 10 Year Return is at 156.3%, compared to 161.0% last month and 215.4% last year.

How much will S&P be worth in 10 years? ›

For an S&P 500 index fund, many come with no minimum investment. For an S&P 500 ETF, you might need to pay the full price of a single share, which is generally upwards of $100—but some robo-advisors like Stash offer fractional shares for as little as $5.

If you invested $500 a month for 10 years and earned a 4% rate of return, you'd have $73,625 today. If you invested $500 a month for 10 years and earned a 6% rate of return, you'd have $81,940 today. If you invested $500 a month for 10 years and earned an 8% rate of return, you'd have $91,473 today.

Once you have $1 million in assets, you can look seriously at living entirely off the returns of a portfolio. After all, the S&P 500 alone averages 10% returns per year. Setting aside taxes and down-year investment portfolio management, a $1 million index fund could provide $100,000 annually.

In order to hit your goal of $1 million in 10 years, SmartAsset's savings calculator estimates that you would need to save around $7,900 per month. This is if you're just putting your money into a high-yield savings account with an average annual percentage yield (APY) of 1.10%.

The 10-year earnings would be $51,140.13. The rates on both traditional and high-interest savings accounts are variable, which means the rates can go up or down over time. These earnings projections are based on the initial rate, which is likely to change.

Present value of perpetuity:

So, a $100 at the end of each year forever is worth $1,000 in today's terms.

Basic Info. S&P 500 5 Year Return is at 54.51%, compared to 57.45% last month and 71.33% last year. This is higher than the long term average of 44.37%. The S&P 500 5 Year Return is the investment return received for a 5 year period, excluding dividends, when holding the S&P 500 index.

Stock Market Average Yearly Return for the Last 20 Years

The historical average yearly return of the S&P 500 is 10.05% over the last 20 years, as of the end of April 2023. This assumes dividends are reinvested. Adjusted for inflation, the 20-year average stock market return (including dividends) is 7.335%.

3 S&P 500 SPDR (SPY) Dividend Earned On 1000$ Investment

The third section will help you know the total dividend earned on a 1000$ investment in SPY over 10 years. By investing 1000$ in SPY 10 years ago, you would have earned a total dividend of 320$ (until 2023-06-02).

Do most investors beat the S&P 500? ›

The phrase "beating the market" means earning an investment return that exceeds the performance of the Standard & Poor's 500 index. Commonly called the S&P 500, it's one of the most popular benchmarks of the overall U.S. stock market performance. Everybody tries to beat it, but few succeed.

Fund description

The Invesco S&P 500® Downside Hedged ETF (Fund) is an actively managed exchange-traded fund (ETF) that seeks to achieve positive total returns in rising or falling markets that are not directly correlated to broad equity or fixed-income market returns.

The main drawback to the S&P 500 is that the index gives higher weights to companies with more market capitalization. The stock prices for Apple and Microsoft have a much greater influence on the index than a company with a lower market cap.

Key Points. S&P 500 ETFs are a relatively safe investment. However, they can still earn substantial returns over time. By investing consistently, it's possible to build a million-dollar portfolio.

How old is the average millionaire? The average millionaire is 57 years old. This is because it takes smart financial decisions, hard work, and wise investments to become a millionaire, most of which don't fully pay off until around the age of 50 or 60.

The term “Lost Decade for Stocks” refers to the ten-year period from 12/31/1999 through 12/31/2009, when the S&P 500^® generated an annualized total return of -0.9% over the period. This was only the second time that the market actually had a negative total return over a decade period.

With that, you could expect your $10,000 investment to grow to $34,000 in 20 years.

History shows us that investing in an S&P 500 index fund -- a fund that tracks the S&P 500's performance as closely as possible -- is remarkably safe, regardless of timing. The S&P 500 has never produced a loss over a 20-year holding period.

Legendary investor Warren Buffet once said that all it takes to make money as an investor is to 'consistently buy an S&P 500 low-cost index fund. ' And academic research tends to agree that the S&P 500 is a good investment in the long term, despite occasional drawdowns.

Does the S&P 500 double every 5 years? ›

How long has it historically taken a stock investment to double? NYU business professor Aswath Damodaran has done the math. According to his math, since 1949 S&P 500 investments have doubled ten times, or an average of about seven years each time.

Whether you're nervous about market volatility or simply want an investment you can count on to keep your money safe, an S&P 500 ETF or index fund is a fantastic choice. This type of investment tracks the S&P 500 itself, meaning it includes the same stocks as the index and aims to mirror its performance.

How much will $100k be worth in 20 years? If you invest $100,000 at an annual interest rate of 6%, at the end of 20 years, your initial investment will amount to a total of $320,714, putting your interest earned over the two decades at $220,714.

Basic Info. S&P 500 3 Year Return is at 37.30%, compared to 43.16% last month and 50.15% last year.

ETFs carry more flexibility; they trade like stocks and can be bought and sold throughout the day. Mutual fund shares price only once per day, at the end of the trading day, but may benefit from economies of scale. While Vanguard fees are low in many of its products, ETFs tend to be more tax-efficient.

Vanguard S&P 500 ETF seeks to track the investment performance of the S&P 500 Index, a widely recognized benchmark of U.S. stock market performance that is dominated by the stocks of large U.S. companies. Vanguard S&P 500 ETF is an exchange-traded share class of Vanguard 500 Index Fund.

Vanguard S&P 500 (VOO): Dividend Yield. The Vanguard S&P 500 (VOO) ETF granted a 1.37% dividend yield in 2022.

Vanguard 500 Index Fund Admiral Shares (VFIAX) Why we chose it: Vanguard 500 Index Fund Admiral Shares (VFIAX) stands out for its historical performance over time.

Are ETFs more risky than index funds? ›

Neither an ETF nor an index fund is safer than the other, as it depends on what the fund owns. Stocks will always be risker than bonds, but will usually yield higher returns on investment.

The next Vanguard S&P 500 ETF dividend is expected to go ex in 7 days and to be paid in 12 days. The previous Vanguard S&P 500 ETF dividend was 148.74c and it went ex 3 months ago and it was paid 3 months ago. There are typically 4 dividends per year (excluding specials), and the dividend cover is approximately 1.0.

The largest S&P 500 ETF is the SPDR S&P 500 ETF Trust SPY with $408.14B in assets. In the last trailing year, the best-performing S&P 500 ETF was SPXL at 35.08%. The most recent ETF launched in the S&P 500 space was the Direxion Daily S&P 500 Bear 1X Shares SPDN on 06/08/16.

The difference between a total stock market index fund and an S&P 500 index fund is that the S&P 500 Index includes only large-cap stocks. The total stock index includes small-, mid-, and large-cap stocks. However, both indexes represent only U.S. stocks.

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.

Vanguard S&P 500 ETF pays Quarterly dividends to shareholders.

Vanguard Funds With a Record of Beating the S&P 500: Vanguard International Growth Fund (VWIGX) The Vanguard International Growth Fund (MUTF:VWIGX) mostly tracks stocks of companies located outside the United States and is expected to diversify its assets in countries across developed and emerging markets.

How many index funds you own should depend on how diversified those indexes are. If you invest in well-diversified funds, you may only need one or two. If you invest in targeted funds that track specific sectors, then you should own many funds to build a broad, diversified portfolio.