Meet the Cheapest Vanguard ETF that Crushes the S&P 500 in 2025
As the stock market continues to shift, investors are always on the lookout for affordable and reliable investment options. One such option is the Vanguard S&P 500 ETF, which has consistently outperformed its benchmark, the S&P 500 index, while maintaining an extremely low expense ratio.
A Look Back at 2025
In 2025, the Vanguard S&P 500 ETF (VOO) demonstrated its remarkable performance by outpacing the S&P 500 index. With a total return of 14.7%, the ETF handily beat the index’s 13.5% gain. This is not a new phenomenon, however. Since its inception in 2010, the VOO has consistently outperformed the S&P 500, boasting a 6-year average annual return of 11.1% compared to the index’s 9.1%.
Low-Cost Leadership
What sets the VOO apart is its exceptionally low expense ratio of just 0.04%. This is significantly lower than the industry average of 0.08% for S&P 500 ETFs. In fact, it’s the lowest expense ratio among all S&P 500 ETFs, making it an attractive option for investors seeking exposure to the broader market at a fraction of the cost.
Diversification through Index Investing
The VOO holds a basket of 500 of the largest publicly traded companies in the US, providing investors with instantaneous diversification. This diversification is particularly appealing, as it helps reduce risk and increase potential returns. By holding a broad range of stocks, investors can benefit from the performance of the market without having to micro-manage individual stocks.
Consistency and Reliability
The VOO’s consistent performance is not limited to 2025. Over the past decade, the ETF has demonstrated remarkable stability, with a standard deviation of just 5.3%. This means that the ETF’s returns have been relatively consistent, reducing the likelihood of significant losses and providing a smoother ride for investors.
Conclusion
In conclusion, the Vanguard S&P 500 ETF (VOO) has once again proved its mettle by outperforming the S&P 500 index in 2025. With its low expense ratio, diversified portfolio, and reliable performance, this ETF has become a staple in many investors’ portfolios. For those seeking a low-cost, index-tracking ETF, the VOO is an excellent option. As the market continues to evolve, the VOO remains a solid choice for those looking to ride the waves of the broader market.
