Vanguard stock price

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Investment Objective

The investment seeks to track the performance of the Standard & Poor‘s 500 Index that measures the investment return of large-capitalization stocks. The fund employs an indexing investment approach designed to track the performance of the Standard & Poor's 500 Index, a widely recognized benchmark of U.S. stock market performance that is dominated by the stocks of large U.S. companies. The advisor attempts to replicate the target index by investing all, or substantially all, of its assets in the stocks that make up the index, holding each stock in approximately the same proportion as its weighting in the index.

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The Vanguard Group

American investment management company

For the anarchist political group, see Vanguard Group (anarchist).

The Vanguard Group, Inc. is an American registered investment advisor based in Malvern, Pennsylvania with about $7 trillion in global assets under management, as of January 13, 2021.[5] It is the largest provider of mutual funds and the second-largest provider of exchange-traded funds (ETFs) in the world after BlackRock's iShares.[6] In addition to mutual funds and ETFs, Vanguard offers brokerage services, variable and fixed annuities, educational account services, financial planning, asset management, and trust services. Several mutual funds managed by Vanguard are ranked at the top of the list of US mutual funds by assets under management.[7] Along with BlackRock and State Street, Vanguard is considered one of the Big Three index fund managers that dominate corporate America.[8][9]

Founder and former chairman John C. Bogle is credited with the creation of the first index fund available to individual investors and was a proponent and major enabler of low-cost investing by individuals,[10][11] though Rex Sinquefield has also been credited with the first index fund open to the public a few years before Bogle.[12]

Vanguard is owned by the funds managed by the company and is therefore owned by its customers.[13] Vanguard offers two classes of most of its funds: investor shares and admiral shares. Admiral shares have slightly lower expense ratios but require a higher minimum investment, often between $3,000 and $100,000 per fund.[14] Vanguard's corporate headquarters is in Malvern, a suburb of Philadelphia. It has satellite offices in Charlotte, North Carolina, and Scottsdale, Arizona. The company also has offices in Canada, Australia, Asia, and Europe.

History[edit]

Formation[edit]

In 1951, for his undergraduate thesis at Princeton University, John C. Bogle conducted a study in which he found that most mutual funds did not earn more money compared to broad stock market indexes.[15] Even if the stocks in the funds beat the benchmark index, management fees reduced the returns to investors below the returns of the benchmark.[16]

Immediately after graduating from Princeton University in 1951, Bogle was hired by Wellington Management Company.[17] In 1966, he forged a merger with a fund management group based in Boston.[17] He became president in 1967 and CEO in 1970.[17] However, the merger ended badly and Bogle was therefore fired in 1974.[17] Bogle has said about being fired: "The great thing about that mistake, which was shameful and inexcusable and a reflection of immaturity and confidence beyond what the facts justified, was that I learned a lot. And if I had not been fired then, there would not have been a Vanguard."[18]

Bogle arranged to start a new fund division at Wellington. He named it Vanguard, after Horatio Nelson's flagship at the Battle of the Nile, HMS Vanguard.[19] Bogle chose this name after a dealer in antique prints left him a book about Great Britain's naval achievements that featured HMS Vanguard. Wellington executives initially resisted the name, but narrowly approved it after Bogle mentioned that Vanguard funds would be listed alphabetically next to Wellington funds.[10]

Growth of company[edit]

The Wellington executives prohibited the fund from engaging in advisory or fund management services. Bogle saw this as an opportunity to start a passive fund tied to the performance of the S&P 500, which was established in 1957.[10][11] Bogle was also inspired by Paul Samuelson, an economist who later won the Nobel Memorial Prize in Economic Sciences, who wrote in an August 1976 column in Newsweek that retail investors needed an opportunity to invest in stock market indexes such as the S&P 500.[20][21]

In 1976, after getting approval from the board of directors of Wellington, Bogle established the First Index Investment Trust (now called the Vanguard 500 Index Fund).[22] This was one of the earliest passive investing index funds, preceded a few years earlier by a handful of others (e.g., Jeremy Grantham's Batterymarch Financial Management in Boston, and index funds managed by Rex Sinquefield at American National Bank in Chicago, and John "Mac" McCown at Wells Fargo's San Francisco office).[23][12]

Bogle's S&P 500 index raised $11 million in its initial public offering, compared to expectations of raising $150 million.[24] The banks that managed the public offering suggested that Bogle cancel the fund due to the weak reception, but Bogle refused.[10][11] At this time, Vanguard had only three employees: Bogle and two analysts. Asset growth in the first years was slow, partially because the fund did not pay commissions to brokers who sold it, which was unusual at the time. Within a year, the fund had only grown to $17 million in assets, but one of the Wellington Funds that Vanguard was administering had to be merged in with another fund, and Bogle convinced Wellington to merge it in with the Index fund.[10][11] This brought assets up to almost $100 million.

Growth in assets accelerated after the beginning of a bull market in 1982, and the indexing model became more popular at other companies. These copy funds were not successful since they typically charged higher fees, which defeated the purpose of index funds. In December 1986, Vanguard launched its second mutual fund, a bond index fund called the Total Bond Fund, which was the first bond index fund ever offered to individual investors.[25] One earlier criticism of the first Index fund was that it was only an index of the S&P 500.[10][11] In December 1987, Vanguard launched its third fund, the Vanguard Extended Market Index Fund, an index fund of the entire stock market, excluding the S&P 500.[26] Over the next five years, other funds were launched, including a small-cap index fund, an international stock index fund, and a total stock market index fund. During the 1990s, more funds were offered, and several Vanguard funds, including the S&P 500 index fund and the total stock market fund, became among the largest funds in the world, and Vanguard became the largest mutual fund company in the world.[27] Noted investor John Neff retired as manager of Vanguard's Windsor Fund in 1995, after a 30-year career in which his fund beat returns of the S&P 500 index by an average of 300 basis points per year.[28]

Recent[edit]

Bogle retired from Vanguard as chairman in 1999 when he reached the company's mandatory retirement age of 70 and he was succeeded by John J. ("Jack") Brennan.[29] In February 2008, F. William McNabb III became President[30] and in August 2008, he became CEO.[31] Both of Bogle's successors expanded Vanguard's offerings beyond the index mutual funds that Bogle preferred, in particular into exchange traded funds (ETFs) and actively managed funds.[32] Some of Vanguard's actively-managed funds predate Bogle's retirement however (their healthcare stock fund began in 1984).[33] Bogle had been skeptical of ETF's as they trade mid-day like single stocks while mutual funds trade on a single price at day's end. He believed buy and hold investors could make good use of ETFs tracking broad indices, but thought ETFs had potentially higher fees due to the bid ask spread, could be too narrowly specialized, and worried anything that could be traded mid-day would be traded mid-day, potentially reducing investor returns.[34]

In May 2017 Vanguard launched a fund platform in the United Kingdom.[35]

In July 2017, it was announced that McNabb would be replaced as chief executive officer by chief investment officer Mortimer J. Buckley, effective January 1, 2018.[36] McNabb remains at the company as chairman.[37]

In 2020, Vanguard rolled out a digital adviser and began building up an investment team in China.[38] In October 2020, Vanguard returned about $21 billion in managed assets to government clients in China due to concerns about legal compliance, staffing and profitability.[39]

See also[edit]

References[edit]

  1. ^"The Vanguard Group, Inc.: Private Company Information - Bloomberg". www.bloomberg.com. Retrieved December 22, 2019.
  2. ^https://www.dnb.com/business-directory/company-profiles.the_vanguard_group_inc.7cff952d65be1a3ab3ecf380e8c9787d.htm
  3. ^"The Financial Times". www.ft.com. January 12, 2021.
  4. ^"Fast facts about Vanguard". The Vanguard Group, Inc. Retrieved March 5, 2019.
  5. ^Flood, Chris (13 January 2021). "Vanguard's assets hit record $7tn". Financial Times. Archived from the original on 21 June 2021. Retrieved 21 June 2021.
  6. ^"ETF League Tables - ETF.com". Retrieved 22 March 2017.
  7. ^"Lipper Performance Report"(PDF).
  8. ^Bebchuk, Lucian; Hirst, Scott (2019). "Index Funds and the Future of Corporate Governance: Theory, Evidence, and Policy". Columbia Law Review. 119 (8): 2029–2146. SSRN 3282794.
  9. ^McLaughlin, David; Massa, Annie (January 9, 2020). "The Hidden Dangers of the Great Index Fund Takeover". Bloomberg Businessweek. Retrieved June 7, 2021.
  10. ^ abcdef"Lightning Strikes: The Creation of Vanguard, the First Index Mutual Fund, and the Revolution It Spawned"(PDF). Bogle Financial Markets Research Center. April 1, 1997.
  11. ^ abcdeSommer, Jeff (August 11, 2012). "A Mutual Fund Master, Too Worried to Rest". New York Times. Retrieved February 2, 2015.
  12. ^ abRiley, Naomi Schaefer (October 26, 2012). "The Weekend Interview with Rex Sinquefield: Meet One of the Super-PAC Men". WSJ. Retrieved December 30, 2015.
  13. ^DiStefano, Joseph N. "Vanguard SEC filings drop 'at-cost,' 'no profit' claims that were dear to late founder John Bogle". The Philadelphia Inquirer. Retrieved 2019-10-04.
  14. ^"Admiral Shares help keep your costs under control". Vanguard. April 9, 2020.
  15. ^Armbruster, Mark (October 14, 2016). "Comparing index mutual funds and active managers"(PDF). Rochester Business Journal.
  16. ^MacBride, Elizabeth (October 14, 2015). "Jack Bogle: Follow these 4 investing rules—ignore the rest". CNBC.
  17. ^ abcdFerri, Rick (February 10, 2014). "What Was John Bogle Thinking?". Forbes Magazine.
  18. ^Boyle, Matthew (December 17, 2007). "Be prepared for a lot of bumps". Fortune Magazine.
  19. ^Reklaitis, Victor (December 22, 2014). "5 things you don't know about Vanguard". MarketWatch.
  20. ^Mihm, Stephen (September 6, 2016). "How Index Funds Prevailed". Bloomberg L.P.
  21. ^Baldwin, William (January 21, 2015). "Is Vanguard Too Successful?". Forbes Magazine.
  22. ^Culloton, Dan (August 9, 2011). "A Brief History of Indexing". Morningstar.
  23. ^Justin Fox (2011). The Myth of the Rational Market: A History of Risk, Reward, and Delusion on Wall Street. HarperBusiness, ISBN 9780060599034
  24. ^Bogle, John; Rafalaf, Andrew (October 1, 2002). "A Wall Street Revolution". Fortune Magazine. CNN.
  25. ^Bogle, John C. (July 5, 2012). The Clash of the Cultures: Investment vs. Speculation. John Wiley & Sons. ISBN .
  26. ^"Quick Guide to Vanguard Extended Market Index Investor Fund". Zacks.
  27. ^Godin, Seth (1997). If You're Clueless about Mutual Funds and Want to Know More. Dearborn Financial Publishing, Inc. p. 98.
  28. ^Loth, Richard. "The Greatest Investors: John Neff". Investopedia.
  29. ^Costello, Martine (August 12, 1999). "Vanguard's Bogle retires". CNN.
  30. ^"McNabb To Succeed Brennan At Vanguard". Forbes Magazine. February 22, 2008.
  31. ^"Executive Moves". Money Management Executive. December 14, 2009.
  32. ^"Index funds vs. actively managed funds | Vanguard". investor.vanguard.com. Retrieved 2020-05-19.
  33. ^Vanguard Health Care Fund Investor Shares (VGHCX) Vanguard.com, accessed 09 July 2021
  34. ^Christine Benz (2010). Bogle: Buy and Hold, Don't Trade ETFs. Morningstar.com, accessed 09 July 2021
  35. ^Ricketts, David. "Hargreaves hit as Vanguard goes direct to man on the street". Retrieved 2019-10-04.
  36. ^Smith, Peter (July 13, 2017). "Tim Buckley to succeed Bill McNabb as Vanguard chief". Financial Times. Retrieved July 14, 2017.
  37. ^Moyer, Liz (2017-07-13). "Vanguard, manager of $4.4 trillion and leader in the index fund business, is getting a new CEO". CNBC. Retrieved 2018-01-26.
  38. ^Robin Wigglesworth, Richard Henderson (12 January 2020). "Vanguard and the US financial system: too big to be healthy?". Financial Times. Retrieved 21 December 2020.CS1 maint: uses authors parameter (link)
  39. ^Bloomberg News. "Vanguard Returns $21 Billion in Assets to China State Funds". Bloomberg. Archived from the original on 11 October 2020. Retrieved 11 October 2020.

External links[edit]

Sours: https://en.wikipedia.org/wiki/The_Vanguard_Group

Vanguard Total Stock Market Index fund aims to replicate the composition of the US equity market, providing a broadly diversified and low-turnover portfolio for a cheap fee. All of its share classes earn Morningstar Analyst Ratings of Gold except for the Investor class, which receives a Silver rating due its higher fee.

The CRSP U.S. Total Market Index tries to capture the entire investable U.S. equity market. This index reaches further down the market-cap ladder than many of its Morningstar Category peers. Its small-cap exposures, though not substantial, can provide a performance edge over category peers when smaller stocks rally. Smaller names may be more difficult to trade, but the index makes some accommodations. Stocks must pass several investability screens to ensure the index is easier to track. These screens are stricter for additions than deletions to reduce turnover. The index also spreads its rebalancing trades over a five-day period to mitigate the market impact costs of trades.

The index weights holdings by their float-adjusted market-cap, leveraging the market’s wisdom to determine each stock’s relative value. Well-known large-cap stocks make up most of this fund, so a stock’s price should quickly reflect any new information. The resulting portfolio is well-diversified and representative of the investment opportunities in the large-blend category.

However, market-cap weighting can expose the index to significant stock- or sector-level concentration during the market’s intermittent manic episodes. This can tilt the portfolio towards richly valued names or sectors, such was the case at the height of the technology bubble. Nonetheless, in the long run, the benefits of broad diversification and low turnover outweigh these drawbacks. The fund’s razor-thin expense ratio is its greatest strength. All of its share classes charge below 0.05% annually except for the Investor share class, which charges 0.14%. Thanks to these low fees, as well as its low cash balance, the fund has outperformed the category average by 1.9 percentage points annualized since its inception through January 2021.

Sours: https://www.morningstar.com/etfs/arcx/vti/quote

Price vanguard stock

VTI

Vanguard Total Stock Market ETF

This ETF offers broad exposure to the U.S. equity market, investing in thousands of different securities across all sectors. That makes VTI an appealing option for investors looking to simplify their portfolios and minimize rebalancing obligations, as this fund can serve as a core holding of a long-term portfolio. VTI can potentially be useful as a tool for establishing quick exposure to risky assets, though most shorter-term traders with that objective will gravitate towards products such as SPY instead. One of the most attractive aspects of VTI, in addition to the extremely broad base of holdings and balance of exposure, is the price. This ETF is one of the cheapest products available, and the ability to trade commission free within a Vanguard account further increases the appeal to cost-conscious investors. For those looking to minimize fees, VTI will fit right into a portfolio. One attribute worth noting, however, is the tilt towards large caps. While VTI includes companies of all sizes, the allocations to mid caps and small caps are not significant. Those seeking more balanced exposure to U.S. equities may want to use VTI alongside more targeted products focusing on smaller companies.

Sours: https://etfdb.com/etf/VTI/
Top 5 Vanguard ETFs to Buy and Hold (2021)

Vanguard Total Stock Market ETF

$224.90

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About VTI

VTI tracks a cap-weighted index that measures the investable US equities market, encompassing the entire market-cap spectrum.

VTI Key Statistics

Price-Earnings Ratio

32.27

View Prospectus and Reports

Average Annual Return

Breakdown of average returns over 12-month periods, updated quarterly. This allows for comparison of returns across funds.
1Y3Y5Y10YSince
May 24, 2001

% Price Return32.16%16.05%16.88%16.60%8.86%

% NAV Return32.09%16.04%16.87%16.60%8.69%

As of September 30, 2021

All investments involve risks, including the loss of principal. Performance data represents past performance and is no guarantee of future results. Investment returns and principal value will fluctuate and are subject to market volatility. Current performance may be lower or higher than the performance data quoted. Full disclosure

Sours: https://robinhood.com/stocks/VTI

Now discussing:

A Look at Vanguard's S&P 500 ETF

The Vanguard S&P 500 ETF (VOO) is a fund that invests in the stocks of some of the largest companies within the United States. Vanguard's (VOO) is an exchange traded fund (ETF) that tracks the S&P 500 index by owning all of the equities within the S&P.

An index is a hypothetical portfolio of stocks or investments representing a specific portion of the market or the entire market. The S&P 500 and the Dow Jones Industrial Average (DJIA) are both examples of broad-based indexes. Investors cannot invest in an index, per se. Instead, they can invest in funds that mirror an index by owning the stocks within the index.

The Vanguard S&P 500 ETF is a popular and reputable index fund. The S&P 500's investment return is considered a gauge of the overall U.S. stock market.

Key Takeaways

  • The Vanguard S&P 500 ETF (VOO) track's the S&P 500 index by investing in all of the stocks within the S&P 500.
  • The Vanguard S&P 500 ETF is appealing for many investors since it's well-diversified and comprised of equities of large U.S. corporations.
  • The Vanguard S&P 500 ETF offers low fees since the fund's management team is not actively trading by buying and selling stocks.

Understanding the Vanguard S&P 500 ETF (VOO)

The S&P 500 represents 500 of the largest U.S. companies. The goal of the Vanguard S&P 500 ETF (VOO) is to track the returns of the S&P 500 index.

The VOO is appealing for many investors since it's well-diversified and comprised of equities of large corporations—called large-cap stocks. Large-cap stocks tend to be more stable with a solid track record of profitability versus smaller companies.

The broad-based, diversified portfolio of stocks within the fund can help lessen, but not eliminate, the risk of loss in the event of a market correction. Some of the key characteristics of the Vanguard S&P 500 (as of August 31, 2021) include:

  • Assets under management (AUM): $805.4 billion
  • Expense ratio: 0.03%
  • SEC Yield (30-day): 1.23%
  • One-year performance: 31.05%
  • Performance since the inception date of September 07, 2010: 16.10%
  • Minimum investment: The price of one share

Please note that the SEC yield is a standardized metric mandated by the Securities Exchange Commission (SEC), which provides investors with a common yardstick for comparing the interest earned and dividend yield of various funds. Dividends are typically cash payments paid to investors by companies as a reward for owning their company's stock.

The Vanguard S&P 500 ETF's Largest Holdings

Listed below are the top ten holdings of the VOO along with their portfolio weightings, which in total make up nearly 30% of the fund's portfolio.

Top Ten Holdings of Vanguard S&P 500 ETF (VOO)
 Holdings Percentage
 Apple Inc. 6.20%
 Microsoft Corp. 5.90%
 Alphabet Inc. 4.40%
 Amazon.com Inc. 3.90%
Facebook Inc.  2.40%
 Tesla Inc. 1.50%
 NVIDIA Corp. 1.40%
 Berkshire Hathaway Inc. 1.40%
 JPMorgan Chase & Co. 1.30%
 Johnson & Johnson 1.20%

Equity Sector Diversification

Many funds contain equities from several sectors within the economy. A sector is a large grouping of companies organized by similar business activities, such as a product or service.

For example, the consumer staples sector represents essential goods, such as toilet paper, while the consumer discretionary sector represents non-essential goods, such as luxury items. Below is the weighting of each sector within the Vanguard S&P 500 ETF.

Equity Sector Diversification for Vanguard S&P 500 ETF (VOO)
 Equity SectorSector Weighting
Information Technology28.00%
Health Care13.40%
Consumer Discretionary11.90%
Communication Services11.50%
Financials11.20%
Industrials8.20%
Consumer Staples5.70%
Materials2.60%
Real Estate2.60%
Utilities2.50%
Energy2.40%

The Risk of Loss from Dangerous Theories

Think back to the real estate boom of the mid-2000s. A common theory as to why real estate prices would appreciate forever was: “They’re not building more land.” This theory meant that supply would be limited, which would lead to increased demand and continuously rising prices.

Unfortunately, many investors were unprepared for the impending real estate crash, which led to the 2007-2008 Financial Crisis in part due to loose lending practices.

Now consider a similar theory with U.S. stocks: “It’s the only place to put your money right now.” An added incentive for many investors has been that if everyone sees U.S. equities as the only place to put their money, it will continue to drive equity prices higher.

In other words, it's essential that investors not become complacent in thinking the market can only go up. With investing in the stock market, there is a risk of market downturns and corrections, which can lead to a significant decline in an investor's portfolio and financial loss.

Valuable Dollars

Investors looking for a low-cost, low-maintenance fund that provides them with access to U.S. equity markets might opt for the Vanguard S&P 500 ETF. However, each investor must consider the level of risk they're willing to take when investing—called risk tolerance. Also, how long the money will be invested in the market should be considered.

Risk Tolerance and Time Horizon

Younger investors might opt to invest all their money in the equity markets since their portfolio has many years to make up for investment losses due to market corrections. Conversely, investors who are at or near retirement might opt for low-risk stocks and securities.

Risk-averse investors might buy U.S Treasury bonds and bills. Although the yield or interest is not always attractive, Treasuries are considered risk-free assets since they're backed by the U.S. Treasury. As a result, investors can't lose their principal or initial investment if the bond is held until its maturity or expiration date.

Rising and Falling Prices

Some investors concerned about the possibility of deflation, which is a decline in the prices of goods in an economy, may leave their money in cash. Although it may appear counterintuitive, if deflation occurs, the cash value in dollars can increase.

Conversely, some investors might be concerned about inflation, which is the pace at which prices increase in an economy. As a result, investors might invest in the stock market, including the Vanguard S&P 500 ETF, hoping to achieve a higher return rate than inflation.

Other investors might invest in securities that adjust for rising prices in the economy. For example, Treasury inflation-protected securities (TIPS) are designed to adjust in price as inflation increases, protecting investors so that they never receive less than the original amount invested.

The Bottom Line

Investing in the Vanguard S&P 500 ETF is a passive investment strategy in which the fund tracks the performance of the S&P 500. In other words, the fund's management team is not actively trading by buying and selling stocks, which helps maintain the lower expense ratio.

Investing in Vanguard's VOO is a low-stress way for investors to access the U.S. equity market. However, there is the risk of loss as with any investment, and investors should consult a financial professional before investing in the Vanguard S&P 500 ETF.

Dan Moskowitz doesn't own shares of VOO.

Sours: https://www.investopedia.com/articles/investing/121814/look-vanguards-sp-500-etf.asp


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