How to Buy VOO: Vanguard S&P 500 ETF Guide
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How to Buy VOO: Vanguard S&P 500 ETF Guide
11 min read
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VOO is the Vanguard S&P 500 ETF, tracking the 500 largest U.S. companies at a 0.03% expense ratio. Open a brokerage account, search the ticker VOO, and place a buy order. You can start with one share or use fractional shares at Fidelity or Schwab.
VOO is the Vanguard S&P 500 ETF, ticker symbol VOO, listed on NYSE Arca. It tracks the S&P 500 Index — a market-cap-weighted index of the 500 largest publicly traded U.S. companies — including Apple, Microsoft, Amazon, Nvidia, and Alphabet.
When you buy one share of VOO, you own a proportional slice of all 500 companies in the index. The fund is managed by Vanguard, the investor-owned asset management company founded by John Bogle, who pioneered low-cost index fund investing in the 1970s.
Key facts about VOO:
VOO does not attempt to beat the market — it simply holds the market. That passive approach is the source of both its remarkably low cost and its long-term reliability as a core portfolio holding for millions of investors worldwide.
The case for VOO rests on three pillars: broad diversification, very low cost, and a long track record of market-matching performance.
Diversification: A single VOO share gives you exposure to 500 companies across all major U.S. sectors — technology, healthcare, financials, consumer staples, energy, utilities, and more. No single company's failure can meaningfully damage your overall investment. The largest holding in the index, Apple, represents only about 7% of the fund's weight.
Low cost: At a 0.03% expense ratio, fees are nearly invisible. Compare this to an actively managed mutual fund charging 0.75%–1.5% annually. On a $100,000 portfolio held for 30 years, that difference in fees compounds to over $100,000 in lost returns.
Proven performance benchmark: The S&P 500 has returned approximately 10% annually on average over long periods. Research consistently shows that the majority of actively managed funds underperform this benchmark over a 10-year period after fees. Owning VOO means capturing that market return at minimal cost.
Before placing your first VOO trade, make sure you have these elements ready:
Choosing the right account type upfront saves you from tax headaches later. If you are eligible for a Roth IRA (single filer income under $161,000 in 2024), contribute there first before using a taxable account.
If you do not already have a brokerage account, here is how to open one. The steps below use Fidelity as an example; the process at Schwab and Vanguard is nearly identical.
Account approval is nearly instantaneous for online applications. You will receive a confirmation email within minutes. Once your account is open and funds are available, you are ready to buy VOO.
With your brokerage account funded, follow these steps exactly to purchase VOO:
During market hours, a market order on VOO typically fills within one to two seconds given VOO's high trading volume. You will see the shares appear in your portfolio holdings immediately upon confirmation. Orders placed outside market hours queue and execute at the following day's market open.
Three ETFs dominate S&P 500 investing. Here is a direct comparison:
To put the fee difference in concrete terms: on a $50,000 investment held for 20 years, VOO's 0.03% costs roughly $1,040 in cumulative fees. SPY's 0.0945% costs roughly $3,270. The $2,230 difference compounds into several thousand more dollars of investment growth with VOO.
Bottom line: For long-term investing in retirement or taxable accounts, choose VOO or IVV — they are functionally interchangeable. Choose SPY only if you are actively trading or using options strategies that require deep liquidity.
The right amount to invest depends on your financial situation, but the right time to start is almost always as soon as possible.
Invest a fixed dollar amount at regular intervals — for example, $300 every month or $150 every two weeks — regardless of VOO's current price. When the price is high, you automatically buy fewer shares. When it is low, you buy more. Over time this smooths your average purchase price and removes the psychological burden of trying to time the market.
Most major brokers support automatic investments on a schedule you set once:
If you have a large sum of cash available from a bonus, inheritance, or savings, research by Vanguard found that investing the entire amount immediately outperforms a DCA approach about two-thirds of the time. The reason: markets tend to rise over time, so more time invested generally beats waiting. If the psychological risk of investing a large amount at once feels uncomfortable, splitting it across three to six months is a reasonable compromise.
Many financial planners suggest younger investors hold 70–100% of their equity portion in broad U.S. index funds like VOO, complemented by international exposure (e.g., VXUS, the Vanguard Total International Stock ETF) and a small bond allocation. As you approach retirement, gradually shift toward bonds and stable income investments to reduce volatility.
Whatever amount you begin with, starting early matters far more than starting with a large amount. An investor who puts $200 per month into VOO starting at age 25 and earns a 9% annual return ends up with over $700,000 by age 65 — even though total contributions were only $96,000. Time in the market is the most powerful variable in long-term investing.
VOO is the Vanguard S&P 500 ETF, a fund that tracks the S&P 500 Index by holding shares in the 500 largest publicly traded U.S. companies. It trades on stock exchanges like an individual stock under the ticker symbol VOO. With over $1.1 trillion in assets under management, it is one of the largest investment funds in the world.
For most individual investors, VOO is widely considered a strong long-term holding. The S&P 500 has historically returned an average of roughly 10% per year before inflation. VOO's 0.03% expense ratio means nearly all of that return goes to investors rather than fees. The vast majority of actively managed funds fail to beat this benchmark consistently after expenses.
VOO's share price fluctuates with the market. As of mid-2025, one share costs roughly $480–$540. At Fidelity and Schwab, you can buy fractional shares for as little as $1, allowing you to start investing before saving enough for a full share. At Vanguard's own platform, whole shares are required.
Yes. VOO can be held in a Roth IRA, Traditional IRA, or any self-directed brokerage account. A Roth IRA is particularly powerful because your investments grow completely tax-free. Many 401(k) plans do not list VOO specifically, but often include a Vanguard Institutional 500 Index Fund that tracks the same index at comparable low fees.
VOO pays dividends quarterly, typically in late March, June, September, and December. The dividend yield is approximately 1.3–1.5% annually, depending on the year. Dividends are passed through from the underlying S&P 500 companies. In a taxable account, qualified dividends are generally taxed at preferential long-term capital gains rates.
All three ETFs track the S&P 500. VOO (Vanguard) and IVV (iShares/BlackRock) both charge a 0.03% expense ratio and are essentially identical for long-term investors. SPY (State Street) charges 0.0945%, more than three times higher, but offers higher daily trading volume — making it preferred by active traders who need tight bid-ask spreads and a deep options market. For retirement or long-term investing, VOO or IVV is the better choice.
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