SWPPX vs. VOO - Which is Better For You?
Overview: SWPPX vs. VOO
SWPPX and VOO are S&P 500 funds
SWPPX is a mutual fund, and VOO is an ETF
SWPPX has a slightly lower expense ratio
Both funds have similar holdings and dividend yields
The first point of distinction between SWPPX and VOO is what type of fund they are. SWPPX is a mutual fund managed by Charles Schwab, while VOO is an ETF by Vanguard.
Even though these distinctions may seem minute, they have significant implications when it comes to how and when you can trade these funds.
With VOO, you can trade throughout the day, while with SWPPX, you can only trade once at the end of the day.
Expense Ratio Comparison
VOO - 0.03%
SWPPX - 0.02%
One of the essential aspects to consider when investing in index funds is the expense ratio. It’s the fee that the fund deducts to cover its operating expenses.
SWPPX has an expense ratio of 0.02%, and VOO has an expense ratio of 0.03%. While this difference might seem infinitesimal on the surface, it can add up to significant sums with substantial investments over the long haul.
Clearly, both funds have extremely minimal costs, but SWPPX comes out slightly ahead.
Dividend Yield Comparison
SWPPX and VOO have essentially identical dividend yields of around 1.45%, making it a nonfactor when comparing.
Both funds track the S&P 500 and should continue to pay similar dividend yields going forward.
Holdings Comparison
Given that both SWPPX and VOO track the S&P 500 Index, their holdings are virtually identical, which include approximately 500 diverse stocks in large-cap U.S. companies.
The actual performance, however, might vary due to the different management styles and expense ratios.
Performance Comparison
As both funds are pegged to the S&P 500 Index, their performance tracks closely to the index, barring small variations due to costs and dividend yield differences.
However, it is important to consider how the S&P 500 will compare to other investment options like high dividend yield ETFs.
Which is Better for You?
The answer lies in your individual needs and the structure that suits your trading style.
If you prefer the ability to trade throughout the day, VOO might be a better fit for you.
However, if you’re not a trader and are after a lower expense ratio, you might lean more toward SWPPX.
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