1 Reason Why Now Is the Time to Buy the Vanguard S&P 500 ETF (VOO)
Key Points
This ETF encompasses most of the U.S. economy (except for smaller companies).
It sports an ultra-low annual fee.
It's been a solid long-term performer, too.
- 10 stocks we like better than Vanguard S&P 500 ETF ›
I can offer lots of reasons why now is the time to invest in the Vanguard S&P 500 ETF (NYSEMKT: VOO), and here's a big one: It's like buying most of the U.S. economy! Bullish on technology? Hopeful about healthcare? This investment has it all.
Remember that an exchange-traded fund (ETF) is a fund that trades like a stock, which makes it easy for people to invest in it. This one is an index fund, tracking the S&P 500 index of 500 of America's biggest companies. As with the best index funds, it sports an ultra-low expense ratio (annual fee) of 0.03%, meaning that you'll only pay $3 per year for every $10,000 you have invested in the fund.
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Image source: Getty Images.
The fund has been a solid performer over time, roughly matching the S&P 500's returns -- which have been close to 10% over many decades. In more recent years, though, the index has grown even faster. Check it out:
|
Time Period |
Vanguard S&P 500 ETF |
|---|---|
|
Past 5 years |
16.62% |
|
Past 10 years |
15.12% |
|
Past 15 years |
14.60% |
Source: Data from Vanguard.com as of October 2, 2025.
Here are its recent top 10 components, by weight:
|
Stock |
Percent of ETF |
|---|---|
|
Nvidia |
7.75% |
|
Microsoft |
6.87% |
|
Apple |
6.32% |
|
Amazon.com |
3.95% |
|
Meta Platforms |
2.93% |
|
Broadcom |
2.55% |
|
Alphabet Class A |
2.26% |
|
Alphabet Class C |
1.83% |
|
Tesla |
1.71% |
|
Berkshire Hathaway Class B |
1.68% |
Source: Vanguard.com, as of Aug. 31, 2025.
Altogether, the 500-some companies in the index make up about 80% of the total U.S. stock market's value, meaning that if you invest in it, you'll be participating in the growth of America. Even Warren Buffett has recommended that most people invest in a low-fee S&P 500 index fund. He wrote in his 2014 letter to shareholders: "Indeed, who has ever benefited during the past 238 years by betting against America?"
So consider parking a little or a lot of your long-term money in this ETF. (It even pays a dividend!)
Should you invest $1,000 in Vanguard S&P 500 ETF right now?
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Selena Maranjian has positions in Alphabet, Amazon, Apple, Berkshire Hathaway, Broadcom, Meta Platforms, Microsoft, and Nvidia. The Motley Fool has positions in and recommends Alphabet, Amazon, Apple, Berkshire Hathaway, Meta Platforms, Microsoft, Nvidia, Tesla, and Vanguard S&P 500 ETF. The Motley Fool recommends Broadcom and recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.
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