VYM vs. VOO: Which ETF is the Best for Your Financial Future?
Compare VYM vs. VOO, two popular US equity ETFs. We analyze their historical performance, holdings, and fees to help you determine which is best for your portfolio.
Key Takeaways
VYM and VOO are both ETFs that track the performance of the U.S. stock market, but they have different strategies and compositions.
VYM focuses on high-dividend yield stocks, while VOO tracks the S&P 500 index, which includes 500 large-cap U.S. stocks.
VYM may be a better option for investors seeking regular income from dividends, while VOO may be a better option for those seeking broad exposure to the U.S. stock market.
Both ETFs have relatively low expense ratios and are good long-term investments.
VYM vs. VOO | Differences Explained
VYM and VOO are two popular exchange-traded funds (ETFs) that invest in US stocks. VYM seeks to track the performance of the FTSE High Dividend Yield Index, which measures the investment return of common stocks of companies characterized by high dividend yields. This ETF offers investors a convenient way to track the performance of stocks forecasted to have above-average dividend yields.
VOO, on the other hand, invests in stocks in the S&P 500 Index, representing 500 of the largest US companies. VOO aims to closely track the index's return, which is considered a gauge of overall US stock returns.
Comparing VYM and VOO is important for investors looking to diversify their portfolios with US equity investments. These two ETFs have different investment objectives and strategies, which can lead to differences in performance, risk, and fees.
By understanding the differences between VYM and VOO, investors can decide which ETF is best for their investment goals and risk tolerance. In this article, we will explore the details of each ETF, compare their historical performance, analyze their holdings, and help investors determine which ETF is right for them.
VYM Details
Expense Ratio: 0.06%
Dividend Yield: 2.88%
10yr Return: 10.61%
VOO Details
Expense Ratio: 0.03%
Dividend Yield: 1.57%
10yr Return: 12.21%
VYM vs. VOO Historical Performance
One important factor to consider when comparing VYM and VOO is their historical performance. Over the past ten years, VOO has outperformed VYM with a 10-year return of 12.21%, compared to VYM's 10-year return of 10.61%.
In addition to historical returns, other factors such as fees, diversification, and investment objectives should also be considered when comparing VYM and VOO.
Fees and expenses are an important factor to consider when comparing VYM and VOO. VOO has a lower expense ratio of 0.03% compared to VYM's 0.06%. This may not seem like a significant difference, but lower fees can lead to higher returns over time. Consider the impact of fees on your investment returns.
VYM Holdings
VOO Holdings
VYM vs. VOO | Which is Best for You?
When deciding between VYM and VOO, it's essential to consider your investment objectives and strategies. VYM is designed for investors seeking a stable income stream from dividend-paying stocks, while VOO is designed for investors seeking long-term growth potential from investing in large-cap US stocks.
Risk tolerance is another important factor to consider when deciding between VYM and VOO. VYM may be more suitable for investors with a lower risk tolerance, as it invests in high dividend-yielding stocks, which are generally considered less volatile than growth-oriented stocks. VOO may be more suitable for investors with a higher risk tolerance, as it invests in large-cap growth stocks, which are generally more volatile but have the potential for higher returns.
Ultimately, the best ETF for you will depend on your individual investment objectives, risk tolerance, and portfolio needs. Both VYM and VOO have their own unique advantages and disadvantages. VYM may be more suitable for investors seeking income and stability, while VOO may be more suitable for investors seeking long-term growth potential.
