What Is the $VOO ETF and Should You Invest in It? A Beginner’s Guide to the Vanguard S&P 500 ETF
- ProfitOnTheStreet
- May 29
- 4 min read

If you’ve been exploring ways to grow your wealth in the stock market, chances are you’ve come across the term $VOO ETF. But what exactly is VOO, why are so many investors talking about it, and should you consider investing?
This guide breaks it all down — from what the VOO ETF is, to its historical performance, key holdings, and whether it’s a smart choice for your portfolio. Whether you’re a new investor or just ETF-curious, this article will give you everything you need to know.
What Is the $VOO ETF?
The VOO ETF, officially known as the Vanguard S&P 500 ETF, is a low-cost, passively managed exchange-traded fund that aims to replicate the performance of the S&P 500 Index. The S&P 500 is a stock market index that includes 500 of the largest publicly traded companies in the United States.
In simple terms, when you invest in VOO, you’re essentially buying a small piece of the 500 most influential companies in America — from Apple to Amazon, and Microsoft to Meta.
A Brief History of the VOO ETF
The VOO ETF was launched by Vanguard on September 7, 2010. Vanguard, a pioneer in index fund investing, created VOO to offer an ultra-low-cost way for investors to gain exposure to the broader U.S. stock market through the S&P 500.
VOO was designed to compete with SPY (SPDR S&P 500 ETF Trust), but with an edge: lower fees. Since its inception, VOO has grown tremendously in popularity among long-term investors, financial advisors, and even institutional investors.
What Companies Are in VOO? Inside the Vanguard S&P 500 ETF
The VOO ETF holdings include a diverse mix of U.S. large-cap stocks across all 11 market sectors. Some of the biggest names you’re likely to recognize include:
Apple (AAPL)
Microsoft (MSFT)
Amazon (AMZN)
NVIDIA (NVDA)
Alphabet (GOOGL/GOOG)
Meta Platforms (META)
Berkshire Hathaway (BRK.B)
Tesla (TSLA)
UnitedHealth Group (UNH)
These companies make up a large portion of the fund due to their massive market capitalizations, but the ETF also includes hundreds of other companies, providing instant diversification.
Historical Returns of the VOO ETF
One of the biggest reasons investors flock to VOO is its strong historical performance. Since its inception in 2010, VOO has closely mirrored the long-term returns of the S&P 500, which historically averages about 10% annual returns (before inflation).
Here’s a snapshot of VOO’s historical returns:
Year | Return (%) |
2013 | 32.3% |
2016 | 11.9% |
2019 | 31.3% |
2020 | 18.4% |
2021 | 28.7% |
2022 | -18.2% |
2023 | 26.3% |
Despite occasional down years (like 2022), long-term investors have historically been rewarded by holding VOO over the years.
Why Do Investors Love the VOO ETF?
Let’s break down the key reasons investors are buying VOO:
✅ Low Expense Ratio
VOO has an ultra-low expense ratio of just 0.03%, meaning you pay only $3 per $10,000 invested annually. That’s far cheaper than most actively managed funds.
✅ Instant Diversification
Buying VOO gives you exposure to 500 companies across all sectors — making it easy to diversify your portfolio with just one investment.
✅ Long-Term Growth Potential
Because it mirrors the performance of the S&P 500, VOO is a great choice for long-term investors looking to benefit from the growth of the U.S. economy.
✅ Passive Investment Strategy
No need to pick individual stocks — VOO follows a passive investment approach, which has historically outperformed most active managers over the long run.
Is VOO a Good Investment for You?
The VOO ETF is a great investment for anyone who:
Wants to invest in the overall U.S. stock market
Prefers a buy-and-hold approach
Is seeking long-term growth over decades
Values low costs and diversification
Doesn’t want to actively trade or pick individual stocks
However, VOO may not be ideal if you’re looking for high dividends, international exposure, or short-term gains. It’s designed for steady, long-term wealth building.
VOO vs SPY: What's the Difference?
Both VOO (Vanguard) and SPY (SPDR) track the S&P 500 Index. The main differences come down to:
Feature | VOO | SPY |
Expense Ratio | 0.03% | 0.09% |
Dividend Payout | Quarterly | Quarterly |
Issuer | Vanguard | State Street |
Minimum Investment | Price of 1 share | Price of 1 share |
VOO wins on cost-efficiency, which can make a big difference over decades of compounding.
Final Thoughts: Should You Invest in the VOO ETF?
If you're looking for a simple, low-cost, long-term investment that mirrors the strength of the U.S. economy, the VOO ETF is one of the best choices out there. Backed by Vanguard’s reputation and the power of the S&P 500, VOO offers a proven track record of growth, diversification, and reliability.
It’s not flashy. It doesn’t promise overnight riches. But for patient investors focused on long-term wealth building, VOO could be the cornerstone of your portfolio.
Key Takeaways
VOO ETF = Vanguard S&P 500 ETF, tracking 500 large U.S. companies.
Ultra-low expense ratio of 0.03% makes it cost-effective.
Offers diversified exposure to top U.S. companies.
Historical returns average around 10% annually.
Ideal for long-term, passive investors.
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