Trying to beat the stock market in any given year generally yields success less than half the time. And if you stretch it over a longer period, like ten years, the odds become even less favorable. It’s often not even worth the effort.
The latest SPIVA US Scorecard from S&P Dow Jones Indices, which is published biannually, shows that more than 90% of actively managed large-cap funds have lagged over the past 15 years.
Remember Nvidia back in 2009? An intriguing signal appears again. In 2009, Nvidia, a little-known chipmaker at the time, revealed a “double down” signal. Now, a company that’s a fraction the size of Nvidia is giving off the same kind of strong signal.
As a result, exchange-traded funds (ETFs) have surged in popularity. Investors appreciate paying minimal fees—often much lower than the 1% or more charged by actively managed funds. This allows them to retain a greater portion of their investment returns without needing to send much of it to a financial advisor.
That reasoning still stands. Why shell out hefty fees when underperformance is likely? Instead of striving to outperform, many people might be better off simply matching the market. It’s a good reason for investors to shift focus and consider purchasing a Vanguard S&P 500 ETF instead.
Why the Vanguard S&P 500 ETF works so well
One of the standout features of the Vanguard S&P 500 ETF is its remarkable simplicity. It tracks the S&P 500 index with an incredibly low expense ratio of just 0.03%. This setup offers investors broad exposure to the large-cap market with almost no associated costs.
In contrast, actively managed mutual funds typically impose management fees of about 1% or even more, which can dramatically impact long-term shareholder returns. Although actively managed ETFs may have better fees, many still charge over 0.5%, which can still weigh negatively on performance.
This efficiency allows investors to capture nearly all their potential profits while closely following the index’s performance. It’s pretty much a win-win for many.
|
VOO Metric |
Value |
|---|---|
|
Assets under management |
$974 billion |
|
Expense ratio |
0.03% |
|
1 year total return |
+31.2% |
|
Total return for 5 years (annualized) |
+14% |
|
Dividend yield |
1.1% |
|
Top sector |
Technology (35%), Finance (12%), Communication Services (11%) |
|
Top holding stocks |
Nvidia (7.9%), Apple (6.5%), Alphabet (6.5%), Microsoft (4.9%) |
Source: Vanguard.
Should you buy Vanguard S&P 500 ETF stock now?
Before you decide to invest in Vanguard S&P 500 ETF shares, consider this:
Our analyst team has pinpointed what they consider to be the 10 best stocks available right now…and interestingly, Vanguard S&P 500 ETF isn’t included in that list. These selections are expected to yield substantial returns in the coming years.
While you might think about past recommendations, remember, someone invested $1,000 in Netflix back when it was recommended would now have about $463,900!* The same goes for Nvidia; that initial $1,000 investment would have grown to around $1,294,401!*
It’s worth noting that the stock advisor program has seen a total average return of 978%—outpacing the S&P 500’s 211% by quite some margin. Don’t overlook our latest Top 10 list; we’ve created a community for retail investors.
* Stock Advisor’s results will be available on May 30, 2026.
