Better Buy: iShares S&P Core 500 Small Cap ETF or Vanguard S&P 500 ETF?
It's a good idea to include exchange-traded funds (ETFs) in your investment portfolio, but with close to 3,000 to choose from in the U.S. alone, how can you decide which ones are best for you? The answer will generally depend on your circumstances, strategy, and investing philosophy, but one good way to start narrowing down your list is to compare their features and performance metrics.
The Vanguard S&P 500 ETF (NYSEMKT: VOO) is one of the largest ETFs on the market, and it's a quintessential index fund. It tracks the S&P 500, which includes 500 of the largest U.S. companies by market cap. Its portfolio includes most major sectors and industries, and its long-term returns should reflect overall economic activity. When people talk about "the market" being up or down, they're generally talking about this index.
The Vanguard S&P 500 ETF offers all the key benefits of index investing. Diversification dilutes the impact of company-specific issues and it limits volatility. Index investors will never enjoy the monster upside that a portfolio with a heavy concentration of a few growth stocks can conceivably deliver, but buying and holding index funds for the long haul is a simple strategy with a great track record.
Source Fool.com
