How To Buy Vanguard S P 500 Index Fund [UPDATED]
The Vanguard S&P 500 ETF (VOO) is a fund that invests in the stocks of some of the largest companies in the United States. It tracks and mirrors the performance of the S&P 500 index."}},"@type": "Question","name": "How Many Stocks Are Present in the Vanguard S&P 500 Index ETF?","acceptedAnswer": "@type": "Answer","text": "The Vanguard S&P 500 Index ETF had 503 stocks in its portfolio as of Q3 2022.","@type": "Question","name": "Does the Vanguard S&P 500 Index Fund Pay Dividends?","acceptedAnswer": "@type": "Answer","text": "Yes, the Vanguard S&P 500 pays quarterly dividends, and as of July 2022, yielded 1.55%.","@type": "Question","name": "Can I Buy Fractional Shares of the Vanguard S&P 500 ETF?","acceptedAnswer": "@type": "Answer","text": "Vanguard does offer the ability to purchase fractional shares for VOO on its platform. But you can purchase fractional shares of the ETF on other investing platforms, such as Schwab and Robinhood.","@type": "Question","name": "Will the Vanguard S&P 500 ETF Split?","acceptedAnswer": "@type": "Answer","text": "The Vanguard S&P 500 (VOO) ETF has undergone a split just once in its lifetime. It occurred on Oct. 24, 2013, when its share price was falling. The company conducted a 1-for-2 reverse split, meaning it combined every two shares held by its investors into a single one. The reverse split reduced the number of shares in circulation and doubled the ETF's price. It also reduced the spread of the difference between the buying and selling price of shares for investors."]}]}] Investing Stocks Bonds Fixed Income Mutual Funds ETFs Options 401(k) Roth IRA Fundamental Analysis Technical Analysis Markets View All Simulator Login / Portfolio Trade Research My Games Leaderboard Economy Government Policy Monetary Policy Fiscal Policy View All Personal Finance Financial Literacy Retirement Budgeting Saving Taxes Home Ownership View All News Markets Companies Earnings Economy Crypto Personal Finance Government View All Reviews Best Online Brokers Best Life Insurance Companies Best CD Rates Best Savings Accounts Best Personal Loans Best Credit Repair Companies Best Mortgage Rates Best Auto Loan Rates Best Credit Cards View All Academy Investing for Beginners Trading for Beginners Become a Day Trader Technical Analysis All Investing Courses All Trading Courses View All TradeSearchSearchPlease fill out this field.SearchSearchPlease fill out this field.InvestingInvesting Stocks Bonds Fixed Income Mutual Funds ETFs Options 401(k) Roth IRA Fundamental Analysis Technical Analysis Markets View All SimulatorSimulator Login / Portfolio Trade Research My Games Leaderboard EconomyEconomy Government Policy Monetary Policy Fiscal Policy View All Personal FinancePersonal Finance Financial Literacy Retirement Budgeting Saving Taxes Home Ownership View All NewsNews Markets Companies Earnings Economy Crypto Personal Finance Government View All ReviewsReviews Best Online Brokers Best Life Insurance Companies Best CD Rates Best Savings Accounts Best Personal Loans Best Credit Repair Companies Best Mortgage Rates Best Auto Loan Rates Best Credit Cards View All AcademyAcademy Investing for Beginners Trading for Beginners Become a Day Trader Technical Analysis All Investing Courses All Trading Courses View All Financial Terms Newsletter About Us Follow Us Facebook Instagram LinkedIn TikTok Twitter YouTube Table of ContentsExpandTable of ContentsVanguard S&P 500 ETFFund SnapshotLargest HoldingsEquity Sector DiversificationHow to InvestDividend History and YieldsFAQsThe Bottom LineInvestingETFsVanguard S&P 500 ETFByDan Moskowitz Full BioDan Moskowitz is a freelance financial writer who has 4+ years of experience creating content for the online reading market.Learn about our editorial policiesUpdated October 04, 2022Reviewed by
how to buy vanguard s p 500 index fund
From the Vanguard homepage, search "Buy funds" or go to the Buy funds page. After you log in, you'll see the page below. Scroll to find the account that you'd like to use for your purchase and then select that account.
Select the checkbox next to an existing fund. If you are not buying a new fund, skip ahead to Step 5. If you are buying a new fund, choose the checkbox next to Add another Vanguard mutual fund.
These fund managers then mimic the index, creating a fund that looks as much as possible like the index, without actively managing the fund. Over time the index changes, as companies are added and removed, and the fund manager mechanically replicates those changes in the fund.
Some of the most watched indexes fill up the financial news every night and are often used as shorthand for the performance of the market, with investors tracking them to get a read on how stocks as a whole are faring.
While some funds such as S&P 500 or Nasdaq-100 index funds allow you to own companies across industries, other funds own only a specific industry, country or even investing style (say, dividend stocks).
The list below includes index funds from a variety of companies tracking a broadly diversified index, and it includes some of the lowest-cost funds you can buy and sell on the public markets. When it comes to index funds like these, one of the most important factors in your total return is cost. Included are three mutual funds and seven ETFs:
The Nasdaq-100 Index is another stock market index, but is not as diversified as the S&P 500 because of its large weighting in technology shares. These two funds track the largest non-financial companies in the index.
While the S&P 500 and Nasdaq are two of the most popular stock market indexes, there are many others that track different parts of the investment universe. These three index funds are also worth considering for your portfolio.
Overview: Vanguard also offers a fund that covers effectively the entire universe of publicly traded stocks in the U.S., known as the Vanguard Total Stock Market ETF. It consists of small, medium and large companies across all sectors.
Your first step is finding what you want to invest in. While an S&P 500 index fund is the most popular index fund, they also exist for different industries, countries and even investment styles. So you need to consider what exactly you want to invest in and why it might hold opportunity:
ETFs have become more popular recently because they help investors avoid some of the higher fees associated with mutual funds. ETFs are also becoming popular because they offer other key advantages over mutual funds.
Index funds tend to be much cheaper than average funds. Compare the numbers above with the average stock mutual fund (on an asset-weighted basis), which charged 0.47 percent, or the average stock ETF, which charged 0.16 percent. While the ETF expense ratio is the same in each case, the cost for mutual funds generally is higher. Many mutual funds are not index funds, and they charge higher fees to pay the higher expenses of their investment management teams.
An index fund is typically created around a specific theme. For example, there are indexes for companies based on their geographic location (such as the U.S.), their size (large companies, as in the S&P 500), their sector (such as semiconductors or healthcare), or whether they pay dividends. An index might also consist of only bonds, or only bonds of a certain quality and duration.
In contrast, the Dow Jones Industrials contains just 30 companies, while the Nasdaq 100 contains about 100 companies. While the holdings of these indexes do overlap, the S&P 500 contains the widest variety of companies across industries and is the most broadly diversified of those three indexes.
S&P 500 index funds are an excellent way to get diversified exposure to the heart of the U.S. stock market. These passively managed funds track the large-cap stocks that represent approximately 80% of the total value of the U.S. equity market.
There are plenty of index funds out there that track the S&P 500, but these three options charge ultra-low expense ratios, which means more of your money stays at work in the fund earning your greater returns. In addition, all three funds closely duplicate or exceed the historical performance of their benchmark index.
Vanguard is one of the biggest names in the industry, and its S&P 500 index fund historically outperforms the benchmark index. Offering a dividend yield of 1.63% and a next-to-nothing expense ratio, investors could do far worse than this fund with an impressive two-decade-long performance history.
Our methodology focused on more than a dozen index funds that aim to track the S&P 500. We excluded from consideration actively managed funds as they tend to charge higher expense ratios without delivering better returns or dividend yields. In addition, we excluded ETFs, which are covered in a separate listing.
Thankfully, you don't have to buy every single stock in the S&P 500 individually. Instead, you can invest in all the stocks in the index with one purchase via a mutual fund or exchange-traded fund (ETF).
Before 1975, if you wanted to buy the 500 stocks in the S&P 500, you would have had to buy each stock individually. Vanguard founder John Bogle introduced the first-ever index fund in that pivotal year, which tracked the S&P 500. 041b061a72