VOO vs VOOG: Which ETF Is Better?
Both VOO and VOOG offer investors a chance to invest in the growth of some of America's largest and most successful companies.
But which fund will come out on top?
Keep reading to find out how these two ETFs stack up against each other and which one might best fit your investment goals.
VOO - Vanguard S&P 500 ETF
Goal: The goal of VOO is to track the performance of the S&P 500 Index, which consists of 500 of the largest U.S. companies.
Number of Stocks held: 506
Dividend Yield: 1.25%
Annual Expense Fee: 0.03%
Benefits of VOO: VOO offers a low-cost and straightforward way for investors to gain exposure to a diverse range of large U.S. companies. Its low expense ratio makes it a cost effective option for those who want to invest in the top public U.S. companies. Additionally, VOO has a history of solid performance, making it a reliable choice for many investors.
Downsides of VOO: A potential downside of VOO is that it may not offer the same growth potential as funds that focus on specific sectors or investment styles (like VOOG) since it’s more diversified.
The Top 10 Stocks Held In $VOO:
Image source: ETF.com
VOOG - Vanguard S&P 500 Growth ETF
Goal: The goal of VOOG is to track the performance of the S&P 500 Growth Index, which consists of companies in the S&P 500 Index that exhibit strong growth characteristics.
Number of Stocks held: 232
Dividend Yield: 1.17%
Annual Expense Fee: 0.10%
Benefits of VOOG: VOOG allows investors to specifically target companies with strong growth prospects within the S&P 500 Index. This can lead to higher returns when growth stocks outperform the broader market. The expense ratio for VOOG is still relatively low, making it a cost-effective choice for those interested in growth stocks.
Downsides of VOOG: A potential downside of VOOG is that it's more concentrated, with fewer stocks than VOO. This can lead to increased volatility and greater risk. Additionally, growth stocks may not always outperform, so there could be periods when VOOG lags behind VOO.
The Top 10 Stocks Held In $VOOG:
Image source: ETF.com
Final Thoughts: VOO vs VOOG
VOO and VOOG are both strong options for investors looking to invest in large U.S. companies.
VOO offers a more diverse range of companies and a slightly higher dividend yield, while VOOG specifically targets growth stocks and may provide higher returns during periods when growth stocks are outperforming.
Over the past 10 years, VOO has returned an average of 11.96% per year, while VOOG has returned 13.21% per year. The best choice for an investor will depend on their risk tolerance and investment objectives.
If you want broad exposure to the U.S. stock market and are focused on a steady income, VOO might be a better fit. If you're willing to take on more risk for potentially higher returns and are interested in growth stocks, VOOG may be the better choice.
- Josh
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Blog Post: #109
