Categories: Exchange Traded Funds (ETFs)U.S. Investing

This Fund Offers S&P Investing on the Cheap

U.S. flag in shape of the United States

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.

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.

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.

Doug Fabian

Doug Fabian is the Editor of Weekly ETF Report, a free weekly e-newsletter, and the newsletter Successful ETF Investing. He’s also the host of the syndicated radio show, “Doug Fabian’s Wealth Strategies.” Doug also edits the fast-paced trading service ETF Trader’s Edge, for investors who want to take their profits to the next level. Taking over the reins from his dad, Dick Fabian, back in 1992, Doug has continued to uphold the reputation of the newsletter as the #1 risk-adjusted market timer as ranked by Hulbert’s Investment Digest. Doug became a member of the “SmartMoney 30” in 1999 — a listing of the most influential individuals in the mutual fund industry. In the feature, SmartMoney magazine exclaims that Doug is the best-known “trend follower” among the $56 billion (and growing) group of financial advisors. In 2001, Doug wrote “Maverick Investing,” published by McGraw-Hill. He also regularly appears at seminars around the country, stands out on the pages of the largest newspapers (The Wall Street Journal, The Los Angeles Times, and The New York Times), and speaks on national television (CNBC, Fox News, and Bloomberg Forum). For more than 35 years, Successful ETF Investing (formerly the Telephone Switch Newsletter and Successful Investing) has produced double-digit percentage annual gains. Doug has become known for his expert knowledge and timely use of innovative tools, such as exchange-traded funds, bear funds, and enhanced-index funds to profit in any market climate. For more information about Doug’s services, go to http://www.fabian.com/