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VV vs VOO: Which Is The Best ETF?

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We are going to explore the difference between VV vs VOO:

Vanguard Large-Cap ETF (VV) vs Vanguard S&P 500 ETF (VOO)

When it comes to investing, there is no shortage of fund options.

Choosing between two funds can be difficult, but I will make it easy to decide between VV vs VOO.

VV vs VOO Graphic Comparison

 

VV vs VOO

The primary difference between VV and VOO is that VOO tracks the S&P 500 index, while VV tracks the CRSP US Large Cap Index.

Another significant difference is the number of stocks in each ETF.  For example, VOO has 513 different companies in the index compared to 594 with VV.

VV and VOO have different expense ratios.

VV has an expense ratio of 0.04%

VOO has an expense ratio of 0.03%

This expense ratio means VV is more expensive than VOO.  Although, the difference is only 0.01% which can be considered insignificant to some investors.

VV

  • Tracks the CRSP US Large Cap Index
  • Expense Ratio 0.04%
  • No Minimum Investment
  • Holds 594 Stocks
  • Dividend Yield 1.38%

VOO

  • Tracks the S&P 500 Index
  • Expense Ratio 0.03%
  • Holds 513 Stocks
  • Equivalent Admiral Fund (VFIAX)
  • Dividend Yield 1.35%

 

VV vs VOO Performance

VV and VOO have had similar performance returns over the last 10 years, with VOO beating VV by 0.10% annually.  Again, this difference can be considered insignificant, even when considering compound interest on those returns.

Here is how VV and VOO performance compares:

VV vs VOO Performance

This is a performance chart comparing VV and VOO:

VV vs VOO Performance Chart

As you can see, VV and VOO have performed similarly over the last year.

However, this doesn’t necessarily mean this trend will continue.

Similarities between VV and VOO:

  • Vanguard Funds
  • Exchange-Traded Funds (ETFs)
  • Low Expense Ratios
  • Well Diversified

 

VV and VOO Differences

The main difference between VV and VOO is that VOO tracks the S&P 500 index, while VV tracks the CRSP US Large Cap Index.  In addition, VOO holds 500 large U.S companies while VV holds 594 large-cap companies in the U.S.

VV is a Large Cap ETF

VOO is a Large Blend ETF

Therefore, VOO has fewer holdings compared to VV.

VV vs VOO Comparison Chart

By investing in an ETF with more holdings, you are helping diversify your portfolio and minimize risk.

Differences between VV and VOO:

  • Asset Allocation (Large-Cap Only vs Large, Mid, and Small Cap)
  • Different Number Of Holdings (594 vs 513)
  • Expense Ratio (0.04% vs 0.03%)
  • Level Of Diversification

 

VV vs VOO Holdings

Vanguard’s VOO has fewer holdings than VV (513 vs 594).  However, VV and VOO have almost the same top 10 holdings.

The difference is that VV’s top 10 holdings make up 29% of its total holdings compared to 30% with VOO.

This difference makes VV slightly more diversified compared to VOO.

VOO will also have more volatility depending on the performance of these 10 holdings.

Here are VV and VOO’s top 10 holdings side by side:

VV vs VOO Holdings

VV and VOO’s top 10 holdings primarily hold Apple, Microsoft, Amazon, Google, and Tesla.

 

VOO and VV Holdings Overlap

There is an overlap between VOO and VV that includes 460 stocks.  Roughly 90% of VOO’s holdings are in VV, and 78% of VV’s holdings are in VOO.

Here are VOO and VV holdings overlap:

VV vs VOO Holdings Overlap

There is overlap by weight of about 95%:

Holdings Overlap By Weight

VV has more diversification compared to VOO.

 

VV Profile

  • Fund Inception: 2004
  • Expense Ratio: 0.04%
  • Number Of Stocks: 594
  • Top 10 Holdings: 29%

The Vanguard Large-Cap ETF (VV) tracks a market-cap-weighted index that covers 85% of the market capitalization of the US equity market.

Vanguard Large-Cap ETF has an MSCI ESG Fund Rating of AA based on a score of 7.80 out of 10.

The ETF holds companies in North America.

VV launched in 2004 and currently has an expense ratio of 0.04%.  This expense ratio makes it a low-cost ETF to own, but not as low as VOO (0.03% expense ratio).

The cost of owning VV over VOO won’t make a significant difference since they are both low-cost ETFs.

More importantly, is being able to achieve the asset allocation you desire.

VV’s equal Admiral Fund is the Vanguard Large-Cap Index Fund Admiral Shares (VLCAX).

 

VV Performance

Vanguard’s VV aims to track the CRSP US Large Cap Index, covering domestic large-cap equities.  VV has the potential for high growth but comes with less diversification than other broad markets ETFs.

Here is VV’s performance chart:

VV Performance Chart

VV Performance

As you can see, VV has had strong growth over the last 10 years.

In the previous 10 years, VV has performed similarly to the S&P 500, with an average return of 13% per year.

 

VV Holdings

Moving on, here are the top 10 holdings for VV:

VV Holdings

VV is primarily made up of Apple, Microsoft, Google, Amazon, and Tesla.

VV has about $41 billion in net assets.

 

No Minimum Investment

VOO and VV are exchange-traded funds (ETFs), so there is no minimum investment.  Investors looking to buy fractional shares can use platforms like M1 Finance.

Usually, fractional shares are not available for ETFs, but with M1 Finance, you can purchase fractional shares with no commission.

Buying fractional shares allows you to maximize your investment.  This is great for shares of VOO due to its high price per share.

There are two easy ways to invest in VOO or VV commission-free.

  1. Vanguard
  2. M1 Finance (Use this link for $50 when you open a new account)

Both of these options are free.  This is important because fees can lower our returns.

I like M1 Finance as the best option because it gives you the flexibility to purchase VOO, VV, and thousands of other stocks.

I also use Personal Capital to track my investment fees. They have a free Retirement Fee Analyzer that tells you the future impact of fees on your portfolio.

Personal Capital Retirement Fee Analyzer

Personal Capital’s free tools allow you to easily find which of your investments has high fees so that you can switch them to low-cost options.  (Get a $20 Amazon Gift Card with this link when you add at least one investment account containing a balance of more than $1,000 within 30 days)

 

VOO Profile

  • Fund Inception: 2010
  • Expense Ratio: 0.03%
  • Number Of Stocks: 508
  • Top 10 Holdings: 30%
  • Dividend Yield: 1.35%
  • Equivalent Admiral Fund (VFIAX)

Vanguard S&P 500 ETF (VOO) is a very popular ETF that tracks the S&P 500 index.  VOO has over $816 billion in fund total net assets.

The fund invests in technology, healthcare, financials, industrials, and other industries and has a low expense ratio.

Vanguard’s VOO ETF has been labeled one of the best investments for beginners because of its low cost, built-in diversification, and excellent performance.

 

VOO Performance

Vanguard’s VOO aims to have the same performance returns as the S&P 500 index.  Therefore, VOO and the S&P 500 should always overlap.

Here is VOO and the S&P 500 Index performance chart:

VOO vs S&P500 Performance Graph

VOO (Blue)                S&P 500 (Yellow)

As you can see, VOO and the S&P 500 overlap in performance.

This should be an expectation in the future.

 

VOO Holdings

VOO Top Holdings

Vanguard’s VOO is primarily made up of Apple, Microsoft, Alphabet, Amazon, and Tesla and provides exposure to over 500 other stocks.

 

Which Is Better VV or VOO?

VV and VOO are similar investments.  However, VV offers more diversification and less volatility since it holds more stocks than VOO.

This diversification hasn’t resulted in better performance returns over the last 10 years.

Even so, I would say both are excellent options for long-term investors.

VV is a great option if you want an asset allocation that includes large-cap U.S stocks.

If you are comfortable with 500 large U.S based companies, VOO allows you to invest in them at a low cost.

I think both VV and VOO can have a place in a long-term investment portfolio.

Lastly, it’s important to consider costs and fees because they can add up in the long run.

That’s why it’s so important to purchase and sell your shares commission-free.

Again a great way to do this is with M1 Finance or using the Vanguard platform directly for these ETFs.

You can purchase fractional shares for free with M1 Finance, and they give you the ability to buy VOO, VV, and thousands of other stocks/ETFs.

 

Index Funds vs Exchange Traded Funds (ETFs)

Exchange-traded funds (ETFs) are usually a more accessible option for new investors since they don’t have a minimum investment.

In comparison, if you can afford to invest more than the minimum, it’s usually better to choose Vanguard admiral index funds because they typically have a lower expense ratio.

In this case, the expense ratio is the same or better with the ETF version of VV and VOO.

Their matching admiral funds are:

VV = Vanguard Large-Cap Index Fund Admiral Shares (VLCAX)

VOO = Vanguard 500 Index Fund Admiral Shares (VFIAX)

ETFs are also available to trade at anytime the market is open.  Index funds trade after the market closes and the price settles.

Depending on your views, this can be a good or bad thing.

For long-term investors, the ability to trade anytime in the day is not a benefit.  On the contrary, it can encourage bad habits like market timing and frequent trading.

If you have these tendencies, an index fund might be a better option.

If you prefer to have every penny invested, you will like that index funds offer fractional share buying on the Vanguard platform.

On the contrary, ETFs have to be bought one total share at a time unless you are using a platform like M1 Finance.

That can sometimes lead to money left uninvested while waiting for your next contribution.

This is more of a preference since I don’t think it will make a significant difference in your returns.

Related Posts:

 

Is VV or VOO Better for Financial Independence?

Both VV and VOO can get you to Financial Independence Retire Early (FIRE).  They both have a similar return on investment and have rock bottom expense ratios.

JL Collins FIRE Calculator

Calculate Your FI Number With My Free FIRE Calculator

So, either option is an excellent investment for financial independence.

 

My Winner: VV

My winner is VV, based on it having a more diversified portfolio with 594 holdings.

As I mentioned, you can invest in both depending on your desired asset allocation.

Both ETFs are Vanguard funds which likely means they will continue to offer low-cost ETFs.

 


Disclaimer
This post may have affiliate links, which means I may receive commissions if you choose to purchase through links I provide (at no extra cost to you). Thank you for supporting the work I put into this site!

This information is my opinion and is for information purposes only. It is not intended to be investment advice. Seek a duly licensed professional for investment advice.
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