1 week ago
11
David Dierking, The Motley Fool
Wed, April 29, 2026 astatine 8:55 AM CDT 5 min read
The Vanguard S&P 500 ETF (NYSEMKT: VOO) is the largest exchange-traded money (ETF) successful the world, managing much than $910 million. At its caller gait of nett inflows, it's imaginable that it could deed the $1 trillion people wrong the adjacent year. It has besides helped millions of investors turn their portfolios done its vulnerability to the biggest companies successful the United States.
Most radical are already somewhat acquainted with the S&P 500, but that doesn't mean you should conscionable propulsion your wealth astatine it. As is the lawsuit with immoderate investment, you should cognize what you're buying and recognize the factors that could impact it.
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Vanguard S&P 500 ETF: Key facts and metrics
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VOO has a 0.03% disbursal ratio. A $10,000 concern costs conscionable $3 per year.
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The Magnificent Seven stocks -- Apple, Microsoft, Nvidia, Amazon, Alphabet, Meta Platforms, and Tesla -- correspond astir 32% of the fund's full weight.
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The S&P 500 has delivered a compound yearly maturation complaint of astir 10% since 1928, including dividends reinvested.
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VOO is simply a marketplace cap-weighted fund, which means its biggest winners automatically turn into larger positions implicit time.
VOO is much concentrated than astir investors recognize
I touched connected the Magnificent Seven banal vulnerability above, but the attraction contented doesn't halt there. The fund's apical 20 holdings relationship for astir fractional of the portfolio. Tech is one-third of the index. Communication services is 10% of the S&P 500, but astir each of that comes from conscionable Meta and Alphabet.
That attraction means a batch of the scale is being influenced by conscionable a fistful of stocks and sectors. That could go a occupation if you judge the tech rally of the past fewer years is owed for a pause.
The lawsuit for staying invested is beardown
Many investors absorption excessively overmuch connected short-term volatility and neglect the semipermanent upside imaginable of U.S. stocks. Over the past 100 years, the S&P 500 has had to woody with the Great Depression, the stagflation of the '70s, Black Monday successful 1987, the tech bubble, the fiscal crisis, and the COVID-19 pandemic. Through each of this, the scale is inactive astatine all-time highs and has delivered an mean yearly instrumentality of astir 10% implicit the past century.
Short-term volatility is portion of the terms of admittance erstwhile investing successful equities. The banal marketplace is inactive the top semipermanent wealthiness instauration instrumentality disposable to investors.
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