This Fund Offers S&P Investing on the Cheap

Doug Fabian

Doug Fabian is known for his expert knowledge of ETFs, bear funds and enhanced index funds to profit in any market climate.

This week’s ETF Talk returns us to the realm of large American companies. There are a variety of ways to track the S&P 500 in exchange-traded fund (ETF) form, and this week’s featured fund offers a similar approach to those we have highlighted in recent weeks. But this one is a Vanguard fund, Vanguard S&P 500 ETF (VOO).

Since we last examined this fund in November, the big picture of the market has shifted. The S&P has been in an overall uptrend in the intervening months that seems to have tapered off and lost some steam early in 2015.

As usual for a Vanguard fund, VOO sports the provider’s characteristic low expense ratio, which in this instance is 0.05%. Good luck trying to find a cheaper way to own the S&P 500. This fund holds $26.5 billion in assets. Its 1.81% dividend yield provides another reason for owning it.

VOO_032015

The biggest S&P 500 sectors, which VOO is designed to match, are technology, which weighs in with 19.90% of the index’s and fund’s assets; financials, at 16.00%; and healthcare, at 14.80%.

In addition, 17.70% of VOO’s funds are invested in its 10 largest positions. These positions include big, well known U.S. companies, such as Apple Inc. (AAPL), 4.0%; ExxonMobil Corporation (XOM), 2.0%; Microsoft Corp. (MSFT), 1.9%; Google Inc. (GOOGL), 1.7%; and Johnson & Johnson (JNJ), 1.5%.

It is hard to go too wrong investing in the S&P, since these large companies are relatively stable while tending to exhibit solid growth figures. If you feel there is safety in numbers, consider trying Vanguard S&P 500 ETF (VOO).

If you want my advice about buying and selling specific ETFs, including appropriate stop losses, please consider subscribing to my Successful ETF Investing newsletter. As always, I am happy to answer any of your questions about ETFs, so do not hesitate to send me an e-mail. You just may see your question answered in a future ETF Talk.

Exclusive  Curtains for Ma Bell & Verizon?

In case you missed it, I encourage you to read my e-letter column from last week about a growth-focused ETF. I also invite you to comment in the space provided below.

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While stocks in the United States enjoyed a strong week of Fed-induced upside, there was a much bigger bullish move this week in China.

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