VFIAX vs. VOO — ETF comparison tool (2024)

FAQs

Is it better to buy VOO or VFIAX? ›

Investors who prefer to trade during the day to take advantage of price fluctuations may prefer an ETF like VOO, whereas a more passive buy-and-hold investor may prefer a mutual fund like VFIAX. Investors using a taxable brokerage account may prefer VOO because tax implications are another important factor to consider.

Vanguard Total Stock Market ETF (VTI)

Because it is also market-cap weighted, VTI's top holdings are very similar to VFIAX.

If you are looking for broader market exposure and are comfortable with a mix of growth and value stocks, VOO may be your go-to option. On the other hand, if you are a value investor seeking long-term gains from undervalued large-cap stocks, VTV could be a better fit for your portfolio.

Vanguard S&P 500 ETF

Somewhat surprisingly, Buffett does not recommend Berkshire stock. Instead, he has consistently told investors to buy an S&P 500 index fund. "I recommend the S&P 500 index fund, and have for a long, long time to people.

The primary difference between SPY, VOO, IVV, and SPLG is their cost. SPLG has the lowest cost at 0.02%, followed by VOO and IVV at 0.03%, and SPY at 0.09%. If you are a cost-conscious investor, the VOO, IVV, and SPLG might make a more attractive option compared to SPY with their lower expense ratios.

As of May 2024, the Vanguard Communication Services Index Fund provided the highest one-year return rate. The Vanguard Mega Cap Growth Index ranked second having a one-year return rate of 37.4 percent.

The returns of VFIAX and VOO have been nearly identical since both funds track the S&P 500 index, but VFIAX has a slightly higher expense ratio, making it cost more to invest in. Therefore, the difference in returns between VFIAX and VOO is very small, but it favors VOO slightly due to its lower expense ratio.

The administrative costs of managing ETFs are commonly lower than those for mutual funds. ETFs keep their administrative and operational expenses down through market-based trading. Because ETFs are bought and sold on the open market, the sale of shares from one investor to another does not affect the fund.

What is the most profitable ETF to invest in? ›

The largest Aggressive ETF is the iShares Core Aggressive Allocation ETF AOA with $1.88B in assets. In the last trailing year, the best-performing Aggressive ETF was EAOA at 17.76%. The most recent ETF launched in the Aggressive space was the iShares ESG Aware Aggressive Allocation ETF EAOA on 06/12/20.

VOO charges 3 basis points, while SPY charges 9 basis points. Both are very low cost compared to the average ETF in the US market. Both are great options, well diversified, are run by amazing teams. However, fees do matter, and you get what you don't pay for in the financial industry.

The goal of the Vanguard S&P 500 ETF is to track the returns of the S&P 500 index. VOO appeals to investors because it's well-diversified and is made up of equities of large corporations—called large-cap stocks.

Currently there's no upside potential for VOO, based on the analysts' average price target. Is VOO a Buy, Sell or Hold? VOO has a conensus rating of Moderate Buy which is based on 400 buy ratings, 98 hold ratings and 7 sell ratings.

VFIAX's 5-year performance has produced a positive alpha of 0, which means managers in this portfolio are skilled in picking securities that generate better-than-benchmark returns. Exploring the equity holdings of a mutual fund is also a valuable exercise.

Both have the same expense ratio and similar dividend yield, so you should choose whichever one you prefer based on the fund's strategy. If you only want to own the biggest and safest companies, choose VOO. If you want broader exposure and more diversification, choose VTI.

The fund offers exposure to 500 of the largest U.S. companies, which span many different industries and account for about three-fourths of the U.S. stock market's value. The key risk for the fund is the volatility that comes with its full exposure to the stock market.

Vanguard touts VFIAX — established in 1976 — as “the industry's first index fund for individual investors.” The exceedingly low expense ratio of just 0.04% makes it an exceptional fund for retirement.