Voo and VGT are ETF funds trading in the US Stock market. Both are growth and Passive Index-Based ETFs, but which one is better? Choosing between two ETFs funds can be difficult, but a comprehensive comparison will make it easy for you to decide between VOO and VGT.
Here is a detailed comparison of both ETFs; let's look at their performance and the other factors that can form the basis for the best choice between Voo and VGT.
VOO
Voo is an exchange-traded fund that tracks S&P 500 index. The S&P 500 represents 500 of the largest U.S. companies. The Vanguard S&P 500 ETF tracks the returns of the S&P 500 index. Currently, there are 508 stocks in its portfolio. The fund is mostly weighted in information technology, healthcare, and consumer discretionary.
VOO is well-diversified and appeals to investors. It is made up of equity from large corporations. Large-cap stocks have a solid track record of profitability and are more stable than smaller companies. VOO quarterly pays dividends. Dividends are usually cash payments companies make to investors as a reward for owning their company's stock. Most rapid-growth companies do not have any policy to pay dividends to their shareholders. They reinvest these earnings into future growth instead of paying.
Investing in Vanguard's VOO is easy to access the U.S. equity market. However, as you know, there is a risk of loss with any investment, and investors should consult a financial expert before investing in the Vanguard S&P 500 ETF.
VOO Holdings
VOO includes stocks of 508 companies. The following are the top holdings of VOO:
• Apple
• Microsoft
• Amazon
• Tesla
• Alphabet Class A
• Alphabet Class C
• Berkshire Hathaway Class B
• United Health Group
• Johnson & Johnson
• Exxon Mobil
VGT
VGT stands for Vanguard Information Technology, which tracks the performance of the MSCI US IMI Info Technology 25/50 Benchmark Index. VGT is a passively managed exchange-traded fund that was launched in 2004. It is an excellent ETF for long-term investment because it is very low cost, transparent, flexible, and tax efficient. It is considered a higher dividend yield, meaning you will get paid more income at the end of the year. The current price of VGT is $327.24, and this ETF's total market cap is $40.11 Billion.
VGT Holdings
VGT includes stocks of 334 companies. The following are the top holdings of VGT:
• Apple Inc.
• Microsoft Inc.
• Visa Inc.
• MasterCard Inc.
• Intel Corp
• NVidia Corp
• Adobe Inc.
• PayPal Holdings Inc.
• Salesforce.com Inc.
Voo vs. VGT: Performance Comparison
Here is a detailed performance comparison of both ETFs.
Performance of Last 10 Years
Over the last ten years, both ETFs have performed differently. Well, that's obvious because they track the different indexes. By seeing the ten years' performance, VOO's turnover is 15.30% yearly. In comparison, VGT's total turnover is 22.03% per year.
Performance in 2022
VOO ETF stock was trading at $436.57 at the beginning of 2022. Since then, VOO shares have decreased by 21.0% and are now trading at $344.77. VGT ETF stock was trading at $458.17 at the start of the year. Since then, the shares of VGT have fallen 28.6% and are now trading at $327.24.
Voo and VGT: Major Differences
Some major differences between VOO and VGT are as follows:
• VOO tracks S&P 500 index, and VGT tracks MSCI US IMI Info Technology 25/50 Benchmark Index
• VGT has a 0.10% expense ratio, and VOO has a 0.03% expense ratio.
• VOO holds 508 stocks, and VGT holds 357 stocks. This factor affects the level of diversification.
• VOO is 28% of its top 10 Holdings, VGT is 57.1% of its top 10 holdings
• VOO has a market cap of $236.77 Billion, and VGT has a market cap of $40.11 Billion
• VOO ETF's current price is $344.77, and VGT stock's current price is $327.24
• VOO ETF pays an annual dividend of $5.81 per share and currently has a dividend yield of 1.77%. While VGT ETF pays an annual dividend of $2.86 per share, this stock has a dividend yield of 0.93%.
So, there were some major differences between VOO and VGT.
VOO and VGT: Major Similarities
Following are some major similarities between VOO and VGT.
• Both are Vanguard funds
• Both have love expense Ratios
• Both are Exchange Trade Funds.
Which one is best? VOO or VGT
Well, it can be difficult for you to choose between VOO and VGT because both are efficient ETFs. But, in my opinion, you should choose VGT over VOO. By seeing the past results, VGT is ideal to choose because VGT has double the growth of VOO's portfolio.
VGT Also performs better in annual returns. There has been no negative annual return for the past ten years. I'm leaning towards the VGT because of its performance. Also, I think the technology sector will outpace other industries in the future.
But if you want to diversify your portfolio, you can choose VOO. In that case, you can get a 15% annual return. But remember, past performance is not the key to future returns. Volatility is a fact and cannot be over-predicted.
Conclusion
So, that's all for VOO VS VGT. Both are one of the best ETFs in the U.S. market. Both ETFs track specific markets and can be reliable investments. Some prominent investment management companies issue them, and the performance gap between them is not far off. So, you can select any of them by setting your investment goals.
Should you invest your hard earned money in these ETFs?
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