Vanguard S&P 500 ETF (VOO)

What is VOO?

VOO is an ETF share class of Vanguard's S&P 500 Index Fund. It aims to track the performance of the S&P 500 by holding the index's constituent stocks in similar proportions, giving investors exposure to 500 large US companies across most major sectors in a single trade.

How VOO compares

VOO, IVV and SPY all track the same S&P 500 index but are issued by different companies and use different legal structures. VOO and IVV are organized as open-end funds, while SPY is organized as a unit investment trust, an older structure with some operational differences. In practice, all three tend to track the S&P 500 closely, and investors often compare them on cost and trading liquidity rather than on the index they follow.

Risks and considerations

Because VOO tracks a market-cap-weighted index, its largest constituent companies have the most influence on its performance. The fund can decline when the broader large-cap US market declines, and tracking an index does not eliminate the risk of loss.

Long-term investing considerations

VOO concentrates exposure in large US companies and does not include international stocks, small-cap companies, or bonds. Investors often combine it with other asset classes as part of a broader plan, and should test a range of return assumptions rather than relying on any single historical period.