Dividend ETFs spent a decade quietly losing ground to the S&P 500 for three very specific reasons. One of Vanguard's most overlooked funds may finally be turning that story on its head.
Investors can't buy directly into a stock market index. Exchange-traded funds like the Vanguard S&P 500 ETF or the SPDR S&P 500 ETF Trust, however, effectively make it possible to do so.
The S&P 500 Index and its top ETFs like VOO and SPY have pulled back in the past few days as concerns about the soaring US debt remained. It retreated to 7,674 points, down slightly from the all-time high of 7,820 points.
If you polled 100 American investors about their core holding, most would name one of two funds: the Vanguard S&P 500 ETF (NYSEARCA:VOO) or the Vanguard Total Stock Market ETF (NYSEARCA:VTI).
The Vanguard S&P 500 ETF (NYSEARCA:VOO) advertises a 0.03% expense ratio, roughly $3 a year on a $10,000 position.
The S&P 500 has historically registered an annualized total return of about 10%. If the past is any guide, investors who buy the Vanguard S&P 500 ETF should do this well.
Owning Vanguard S&P 500 ETF (NYSEARCA:VOO) is the closest thing to a default answer in American investing.
The SPDR S&P 500 ETF Trust (NYSE:SPY) has been the default S&P 500 vehicle since January 23, 1993, and its $9.8 billion-plus asset base reflects three decades of habit, deep options liquidity, and institutional inertia.
The Vanguard S&P 500 ETF (NYSEARCA:VOO) is the fund most retail investors reach for when they want the S&P 500 in one ticker.
You bought Vanguard S&P 500 ETF (NYSEARCA:VOO) because the fee is famously small.
The S&P 500 Index and its top ETFs like VOO and SPY jumped on Monday and are nearing their record highs. It jumped to 7,600 points, its highest level since June 3 of this year.
Those who are familiar with Vanguard's ETF lineup are likely well-acquainted with the Vanguard S&P 500 ETF (VOO). After all, this fund — which provides low-cost exposure to the S&P 500 — is currently the largest fund in terms of AUM.