VOO Forecast: Vanguard S&P 500 ETF Overview

Written by Sean GraytokUpdated: 8th May 2022
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This VOO forecast will provide an overview of the fund by analyzing its holdings, performance, fees, dividend, and even provide guidance on how to buy it. Let’s get started. 

VOO Forecast: Background

VOO is one of the most popular exchange-traded funds (ETF) that tracks the S&P 500 Index.

VOO provides broad market exposure to large cap stocks. Owning VOO is synonymous with “owning the market” because it invests in over 500 companies across various industries.

From technology to finance and real estate, the Vanguard S&P 500 ETF diversifies its holdings.

VOO Forecast: The Details

Here’s a breakdown of the Vanguard S&P 500 ETF:

  • Ticker: VOO
  • Asset Class: Domestic Stock – General
  • Category: Large Blend
  • Expense Ratio: 0.03%
  • Dividend Yield: 1.24%
  • ETF Advisor: Vanguard Equity Index Group
  • Assets Under Management: $290 billion 
  • Number of Holdings: 508

VOO Holdings

While VOO is diversified across several industries, technology and FAAMG stocks have become a major percentage of its allocation. Nearly 30% of the ETF consists of tech stocks.

Here are the top holdings in VOO:

  • Apple (AAPL) 6.92%
  • Microsoft (MSFT) 6.03%
  • Alphabet (GOOG, GOOGL) 4.21%
  • Amazon.com (AMZN) 3.60%
  • Tesla (TSLA) 1.90%
  • Nvidia (NVDA) 1.64%
  • Berkshire Hathaway (BRK.B) 1.58%
  • Meta Platforms (FB) 1.34%
  • UnitedHealth Group (UNH) 1.21%
  • Johnson & Johnson (JNJ) 1.16%

The top ten holdings out of 508 total make up about 28% of the fund. 

VOO Forecast: Performance

According to Vanguard, VOO offers high potential for investment growth; share value rises and falls more sharply than that of funds holding bonds. Here’s VOO’s historical performance as of March 2022:

  • Performance over 1-Year: +17%
  • Performance over 5-Year: +96%
  • Performance over 10-Year: +233%

Given a long enough time horizon, stocks go up and to the right thanks to an expanding money supply.

A basket of the best 500 large cap stocks is no exception.

VOO Forecast: Dividend

As of March 2022, VOO has an annual dividend yield of 1.24% of its share price, or $1.31 per share quarterly, which equates to an annual dividend rate of $5.29 per share. 

Some of the best dividend stocks are in VOO, such as Johnson & Johnson, Walmart, and Home Depot. 

VOO Allocation in Your Portfolio

There isn’t a “one-size-fits-all” when it comes to portfolio construction. Factors like investing goals and time horizons vary from person to person and can result in wildly different allocations.

However, the majority of financial advisors recommend a significant allocation to low-cost index funds like VOO.

Investing in individual stocks is hard — few people are able to outperform the benchmark over the long-term. VOO is this benchmark.

Diversifying across 500 stocks reduces the typical risks that come with owning individual companies.

How to Invest in VOO

Making investments has never been easier or more affordable — here’s how to invest in VOO in three easy steps:

#1. Open an Account with a Broker

Consider opening a account with Vanguard and investing in its low-cost ETFs. Vanguard is trusted by more than 30 million investors and created “passive investing” as we know it today.

We recommend buying VOO in a Roth IRA account before allocating to it in your brokerage account. Roth IRAs are tax-advantaged and brokerage accounts are not.

#2. Fund Your Account

Once you create an account with Vanguard or one of these other online brokers, you’ll need to fund your account.

This is as simple as connecting your bank account to your Vanguard account. You’ll need your bank’s account and routing number.

#3. Buy VOO

You can search for this ETF by typing in its ticker symbol “VOO”. Next, you’ll have to decide on the number of shares to buy.

Some platforms like Robinhoodallow you to buy fractional shares of a stock, so you can invest as little as $1 in a company or ETF.

Alternatives to VOO

There are a handful of other funds that track the S&P 500 Index, such as SPY, SPLG, and IVV.

SPLG and IVV have the same expense ratio as VOO, while SPY’s 0.0945 is slightly higher. However, SPY has the highest liquidity of the group.

If you’re interested in even more exposure to technology stocks, consider investing in QQQ or QQQM, both of which track the Nasdaq-100 Index.

The Dow Jones Industrial Average is the last of the three popular indices. This index was created in 1896 and tracks 30 blue-chip stocks, such as UnitedHealth Group, Goldman Sachs, and Home Depot.

The SPDR Dow Jones Industrial Average ETF (DJIA) is currently the only non-leveraged ETF that provides exposure to the Dow.

Bottom Line: VOO Forecast

VOO is one of the best options for investors that are willing to get rich slowly. Its low fees and broad diversification are boring, but effective.

Keep Reading:

This article is for informational purposes only, and it is not intended to be investment advice. Read our editorial guidelines and public equities research methodology to learn more about how we researched VOO. 

Sean Graytok
Sean Graytok

Sean Graytok is our Co-Founder and is a recognized expert in investing, cryptocurrency, and financial management. His work has been cited in leading industry publications, such as InvestorsPlace and Business Insider. Sean is interested in the people and companies who are driving financial innovation.