This Vanguard ETF Would Have Quadrupled Your Money Over the Last Decade. History Says Now Is a Smart Time to Invest. (It’s Likely to Outperform SpaceX, Too.)
We’re all looking for solid investments for our portfolios, right? It’s easy to focus on big-name high-flying stocks, such as Nvidia or Micron Technology. But there’s also some risk there, as many highfliers end up overvalued and poised to fall extra-hard in a market pullback. (And a market pullback is far from unlikely these days.)
So permit me to suggest a terrific investment that you might not have taken seriously enough: a simple, low-fee S&P 500 index fund. A splendid example is the Vanguard S&P 500 ETF (NYSEMKT: VOO). It’s an exchange-traded fund (ETF) — a fund that trades like a stock.
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Meet the Vanguard S&P 500 ETF
Like any good S&P 500 index fund, the Vanguard S&P 500 ETF features low fees. While some actively managed mutual funds might charge you 1% or more of your assets each year, this fund charges 0.03% — or just $3 annually for every $10,000 you have invested in it.
It tracks the S&P 500, of course — an index of roughly 500 of the biggest stocks in America. Together, they make up about 80% of the value of the entire U.S. stock market, which is why the S&P 500 is often used as a proxy for the total U.S. stock market.
Together, the index’s recent top 10 components make up about 38% of the index’s value by weight. Here they are as of July 9:
|
Stock |
Percentage of ETF |
|---|---|
|
Nvidia |
7.39% |
|
Apple |
6.71% |
|
Microsoft |
4.15% |
|
Amazon.com |
3.83% |
|
Alphabet (Class A shares) |
3.26% |
|
Alphabet (Class C shares) |
3.04% |
|
Broadcom |
2.76% |
|
Meta Platforms |
2.46% |
|
Tesla |
2.22% |
|
Micron Technology |
1.60% |
Data source: Slickcharts.com, as of July 9, 2026.
Like many indexes, the S&P 500 is market-cap-weighted, with bigger companies wielding more influence than smaller ones.
The fund has a solid record. Check out its average annual return over the last three, five, and 10 years (as reported by Morningstar on July 9):
- Last three years: 21.26%
- Last five years: 13.11%
- Last 10 years: 15.36%
Over the last decade, these compounded annual returns would have quadrupled your money.
Why invest in the Vanguard S&P 500 ETF?
Here are several reasons to invest:
- It’s a good time to do so (there’s rarely a bad time, if you’re a long-term investor).
- It makes investing easy, plopping you into roughly 80% of the U.S. stock market with one “buy” order.
- It offers diversification — when one company or industry falls, the others can offset that to some degree. For greater diversification, check out the Invesco S&P 500 Equal Weight ETF (NYSEMKT: RSP), which weights each of the 500 companies in the index equally.
- It’s likely to outperform many growth stocks, especially overvalued ones — including, arguably, Space Exploration Technologies, also known as SpaceX. Consider, for example, that the S&P 500’s price-to-sales ratio was recently 3.7, while SpaceX’s was 74.7. The S&P 500 has a solid track record, averaging annual gains of close to 10% over many decades, but many growth stocks are far less proven.
- The index is designed to perform well, as lagging components are regularly removed to make way for up-and-coming companies.
Take a closer look at this ETF to see if it’s a good fit for your needs.
Should you buy stock in Vanguard S&P 500 ETF right now?
Before you buy stock in Vanguard S&P 500 ETF, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Vanguard S&P 500 ETF wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004… if you invested $1,000 at the time of our recommendation, you’d have $395,679!* Or when Nvidia made this list on April 15, 2005… if you invested $1,000 at the time of our recommendation, you’d have $1,294,805!*
Now, it’s worth noting Stock Advisor’s total average return is 929% — a market-crushing outperformance compared to 211% for the S&P 500. Don’t miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
*Stock Advisor returns as of July 12, 2026.
Selena Maranjian has positions in Alphabet, Amazon, Apple, Broadcom, Meta Platforms, Micron Technology, Microsoft, and Nvidia. The Motley Fool has positions in and recommends Alphabet, Amazon, Apple, Broadcom, Meta Platforms, Micron Technology, Microsoft, Nvidia, Tesla, and Vanguard S&P 500 ETF. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
