VOO is Vanguard's S&P 500 ETF, charging just 0.03% per year in expenses — among the lowest expense ratios of any investment available to individual investors. At that fee level, VOO retains 99.97% of the S&P 500's return. The calculator defaults to 9.97% nominal (10% minus 0.03%) to show a realistic after-fee projection at historical average rates.
VOO was launched in 2010 and has closely tracked the S&P 500 total return index since inception, with tracking error below 0.02% per year. For buy-and-hold investors, the practical difference between VOO, IVV (iShares, also 0.03%), and FXAIX (Fidelity, 0.015%) is essentially zero — all return the S&P 500 minus a negligible fee.
VOO vs. SPY: the cost difference over 30 years
SPY (SPDR S&P 500 ETF) charges 0.0945% per year — about 3× VOO's 0.03%. On a $100,000 investment over 30 years at 10% gross return, that 0.0645% difference compounds to about $10,000 of lost wealth ($1,744,940 vs. $1,733,700 approximately). For most long-term investors, this is not a meaningful amount — the decision between VOO and SPY should be driven by whether your brokerage has a trading fee, not the expense ratio.
Institutional investors often prefer SPY despite the higher cost because SPY has much higher trading volume and tighter bid-ask spreads — making it cheaper to trade quickly in large quantities. For someone investing $1,000/month with no plans to trade, those microstructure advantages are irrelevant.
How to buy VOO and automate contributions
VOO trades on the NYSE Arca exchange like a stock. You can buy it at any brokerage (Fidelity, Schwab, Vanguard, etc.) for the price of one share (currently around $550). Vanguard and other major brokerages offer fractional share purchases, so you can invest a fixed dollar amount (say, $500/month) rather than buying whole shares.
For systematic monthly investing, the simplest approach: set up a recurring bank transfer to your brokerage account on payday, then a recurring automatic investment into VOO for the same amount. This automates dollar-cost averaging with no ongoing decisions required. The "What will it grow to?" mode (Mode B above) shows how this strategy compounds over time.
Frequently asked questions
What is VOO's average annual return?
Since VOO's inception in September 2010, it has closely tracked the S&P 500 total return, which has averaged approximately 14% per year through 2024 — well above the long-run historical average. The long-run S&P 500 historical average of ~10% per year (nominal) is the appropriate planning assumption for a 20–30 year horizon, not the above-average recent decade.
Is VOO a good long-term investment?
VOO is among the most straightforward long-term investment options available: broad diversification (500 large U.S. companies), extremely low cost (0.03%), high liquidity, and no minimum beyond one share price. Whether it is "good" depends on your investment goals — but for a long-horizon investor seeking U.S. large-cap equity exposure, VOO represents the lowest-friction, lowest-cost option to capture that return.
What is VOO's expense ratio and how does it compare?
VOO charges 0.03% per year ($3 per $10,000 invested). Compare this to: actively managed large-cap funds (average ~0.75–1.25%), Fidelity's FXAIX (0.015%), iShares IVV (0.03%), SPDR SPY (0.0945%). For long-term investors, VOO and IVV are functionally equivalent; FXAIX is marginally cheaper. SPY is meaningfully more expensive for the same index exposure.
Does VOO pay dividends?
Yes. VOO distributes dividends quarterly, reflecting the dividends paid by the S&P 500 component companies. The dividend yield has historically been approximately 1.2–1.8% per year. At your brokerage, you can elect to have dividends automatically reinvested (DRIP) or paid out as cash. For long-term compounding, reinvesting is generally preferred.