-Historical performance of VOO – Over 433.68% growth since inception (Source: Google Finance)
If you’re building a long-term portfolio, chances are you’ve come across VOO, the Vanguard S&P 500 ETF. It’s one of the most popular ETFs globally — not just for what it holds, but for how it reflects Vanguard’s investment philosophy: low cost, passive growth, and reinvested dividends.
1. 📌 Basic Information
- ETF Name: Vanguard S&P 500 ETF (VOO)
- Issuer: Vanguard
- Inception Date: September 7, 2010
- Underlying Index: S&P 500 Index
- Index Description: A market-cap weighted index of 500 leading U.S. large-cap companies
- Expense Ratio: 0.03%
- Dividend Frequency: Quarterly (March, June, September, December)
- Dividend Yield (as of May 2025): ~1.30%
- Share Price: ~$450
- Average Volume: ~5 million shares/day
2. ✅ Pros & ⚠️ Cons
✅ Pros
- Ultra-low cost:
At 0.03%, VOO is cheaper than SPY (0.0945%), giving long-term investors a cost advantage. - Backed by Vanguard’s philosophy:
Vanguard’s structure aligns investor and fund manager interests. You’re not just buying an ETF — you’re investing in a trusted, low-fee, long-term system. - Dividend reinvestment-friendly:
With quarterly payouts and low fees, it’s ideal for compounding over time. - Trusted by institutions:
Pension funds, endowments, and global investors hold VOO as a core part of their long-term portfolios.
⚠️ Cons
- Lower liquidity than SPY:
While still highly liquid, VOO doesn’t quite match SPY’s ultra-tight spreads or massive volume. - Top-heavy risk:
As a market-cap weighted fund, it may become overly concentrated in mega-cap names like Apple, Microsoft, and Nvidia.
3. 📈 Historical Performance (CAGR)
- 3-Year CAGR: ~10.8%
- 5-Year CAGR: ~12.2%
- 10-Year CAGR: ~12.6%
Returns are very similar to SPY, but slightly higher after fees over the long term due to VOO’s lower expense ratio.
4. 💰 Dividend Growth
- 3-Year Dividend Growth: ~6.4%
- 5-Year: ~5.1%
- 10-Year: ~6.9%
VOO doesn’t offer high yield, but it has delivered steady dividend growth over time — and that matters when reinvesting.
5. Sector Allocation & Holdings
Top 10 Holdings of VOO as of March 2025 (Source: Toss Securities)
- Total Holdings: ~500 companies
- Top Sectors (as of May 2025):
| Sector | Allocation |
|---|---|
| Information Technology | 30.7% |
| Financials | 14.4% |
| Health Care | 10.2% |
| Consumer Discretionary | 10.1% |
| Communication Services | 9.4% |
| Industrials | 8.6% |
| Consumer Staples | 6.1% |
| Energy | 3.1% |
| Utilities | 2.6% |
| Real Estate | 2.2% |
| Materials | 2.0% |
6. 🔄 Rebalancing Schedule + Real Example
- Rebalancing Frequency: Quarterly (March, June, September, December)
- Criteria: Market cap, liquidity, U.S. listing, profitability
📌 December 2024 Real Rebalancing:
- Added: Apollo Global Management, Workday, Lennox International
- Removed: Catalent, Amentum Holdings, Qorvo
These changes are automatically reflected — no action required by investors.
7. 🧐 Other Considerations
- ✅ Ideal for long-term investors and passive compounding
- ✅ Excellent for dividend reinvestment and consistent growth
- ⚠️ U.S.-only — no international diversification
- ⚠️ Nearly identical to SPY and IVV — no need to hold all three
8. ✍️ Final Thoughts (My Take)
VOO is one of the best ETFs for long-term investors who want to grow their wealth quietly but effectively.
While SPY is an excellent ETF in its own right — and a pioneer in the ETF industry —
I personally find VOO more aligned with my long-term investing philosophy.
Vanguard’s low-cost, investor-first approach gives me more confidence that my money is working efficiently over the decades.
The slight fee difference between SPY and VOO may not seem like much now,
but over 10, 20, or 30 years, it can compound into a meaningful edge.
✔️ For anyone focused on compounding, dividend reinvestment, and true passive growth,
VOO is simply built for the long haul.
9. 🔜 What’s Next?
Next up: IVV — iShares Core S&P 500 ETF.
Let’s break down how it compares with SPY and VOO, and which one might be best for your strategy.
In the meantime, if you haven’t already checked them out:
📦 Curious how VOO compares to SPY? Here’s a full breakdown of SPDR S&P 500
👉 Read Post
📦 If you’re more focused on income and dividend stability, SCHD offers a different approach.
👉 Read Post
10. 📜 Disclaimer & Sharing Note
Just to be clear — I’m not a financial advisor.
I’m simply sharing my personal investing journey here.
Please do what feels right for you. 🙂
Thanks for reading — and as always, invest smart and stay consistent.
See you in the next post! 🚀
Step by step — that’s how we build something lasting.
🔗 Sharing is welcome — but please credit the source (investorJB.com) when you do.