Overview
- Vanguard’s S&P 500 ETF is reaffirmed as a low-cost core holding at a 0.03% expense ratio with broad large-cap exposure across roughly 500 U.S. companies.
- Against SPY, VOO offers lower fees while SPY’s unit investment trust structure can delay dividend reinvestment despite SPY’s far higher trading volume and typically tighter spreads for frequent traders.
- For broader market coverage, VTI adds mid- and small-caps with about 3,500 holdings, while ITOT holds closer to 2,500; both charge 0.03%, and long-run performance differences are minimal, making small-cap preference the key divider.
- To reduce mega-cap tech concentration, RSP’s equal-weight approach spreads exposure across S&P 500 constituents, trading a 0.20% fee and slightly higher yield for lower concentration than IVV’s tech-heavy profile and with a smaller five-year max drawdown but weaker recent returns.
- Small-cap allocation choices pit VB’s wider reach and stronger one-year return (about 14.1%) against SPSM’s lower 0.03% fee and narrower S&P 600 focus, with both funds diversified and tilted to industrials and technology.