VOO vs. VFIAX: What’s the Difference

VOO vs VFIAX

In recent days the stock market is incomplete without VOO vs VFIAX because of their impactful role in it. Both of these are well-known funds by Vanguard. These are highly recommended for long-term investments.

Is it easy for you to differentiate Voo vs VFIAX? Because in recent days people are getting confused that which platform would be the right one for their long-term investments.

It would be difficult for you to choose Vanguard S&P 500 ETF (VOO) and Vanguard 500 Index Fund Admiral Shares (VFIAX) because of the similarity in their features. In today’s discussion, we will try our best to clear all the relevant perspectives on both of these topics to make them more understandable for you.

Their managers don’t like to invest in new startups and penny stocks but rather in High-performance and established companies because their return will surely pan out in due time and the loss percentage will be almost zero.

We will discuss both of them separately and afterward, will assess their similarities and differences accordingly. So let’s start with VFIAX:

Vanguard 500 Index Fund Admiral Share (VFIAX)

VFIAX is considered the very first index for individual investors. If you want to buy High-class stocks in the US equity without having too many resources then S&P 500 index will be the easiest and most affordable way to make it happen. That’s exactly the purpose for which VFIAX was created to help those people who want to achieve market returns at a lower investment.

This fund will make you able to invest in top-performing companies in the US which deal with different industries, and all of these industries cover almost 75% of the whole Stock Market, that’s huge right!

That’s how you can imagine how valuable these funds are for profitable long-term investments. It was designed by Vanguard securities and is the oldest form of funds in existence. The high diversification of their funds is a great feature that makes it less risky and more profitable.

It means that if a few of your stocks will go down then the rest of your stocks portfolio will surely going to cover your loss. Amazing right? That’s the exact reason behind its fame in the stock market. All in all, it’s the best and the safe way investment for the long term.

What makes VFIAX more attractive to investors? Whoever tried to figure out these funds will get to know that it has a very low expense ratio which is a plus point for its users over the other funds in the market.

Let’s talk about its top 10 holdings which are 27.43% of its total assets.  

Name Percentage
Alphabet Inc.
4.06%
Apple
5.92%
Facebook Class A
2.29%
Microsoft Corporation
5.62%
Alphabet Class A
2.02%
Berkshire Hathaway Class B
1.44%
JP Morgan Chase & Co.
1.30%
Alphabet Class C
1.97%
Tesla Inc.
1.44%
NVIDIA
1.37%

Vanguard 500 Index Fund (Voo)

This Vanguard Index Fund is another well know fund in the stock market which is well described as ETF. Its works with 500 companies in the US and all of them are based on S&P 500 market capitalization. These funds work according to the cap system just like the rest of the funds the number of shares multiplied by the actual price of the share. This ETF is used to track the index return of these top trending companies in the USA. These funds are considered trustworthy in the stock market because of their long-term value-increasing qualities. Every investor takes this thing as the most crucial requirement that his investment will be safe in the future or not. Its base is exactly similar to the VFIAX which is famous to tell where to invest at the best time with proper secure planning. If any of you is going to retire then be attentive because it will provide you with the best retirement investment planning. Following are the top 10 holdings with 33.40% of its total asset:
Name Percentage
Alphabet Inc.
4.20%
Apple
6.10%
Amazon.com
3.90%
Microsoft
5.80%
Facebook Inc.
2.20%
NVIDIA
1.40%
Berkshire Hathaway
1.40%
Tesla, Inc.
1.70%
P Morgan Chase & Co.
1.30%
Johnson & Johnson
1.20%

Key Differences: VOO vs VFIAX

VOO vs VFIAX Key Difference
Both of these assets are created by the same company which is the major cause behind the similarity in their functionality and specific differences. After getting familiar with these differences, you will be able to know which one is perfect according to your investment planning. One of their key difference is that VOO is an ETF while in reverse VFIAX is a mutual fund. In VFIAX your investment will be at least $3,000 while you can start your investment from $1 which is easy to approach for all individuals. Another best thing is you can keep investing till $3,000 and then you will be able to convert your shares into tax-free VFIAX. All of these positive aspects of VOO are making it more tradable in the market as compared to VFIAX. Being a mutual fund the prices could be updated per day in VFIAX will make things tough for you, but in Voo, you don’t need to wait for any update, you are free to invest at any moment of the day. Both of these platforms have the same shares S&P 500 which are showing their similar aspects also.

Composition differences: VOO vs VFIAX

Let’s compare both of these funds on behalf of the data given by these platforms.

Categories VOO VFIAX
Consumer Discretionary
10.21%
10.21%
Energy
4.9%
4.9%
Telecommunication
10.4%
10.4%
Health Care
13.7%
13.7%
Staples
7.3%
7.3%
Finance
13.2%
13.2%
IT
21.9%
21.9%
Real Estate
3.1%
3.1%
Industries
9.3%
9.3%
Type
ETF
Mutual Fund
Minimum Investment
Provide Per One Share
$3,000
Utilities
3.3%
3.3%
Investment Category
Large Blend of Stocks
Large Blend of Stocks

Fees: VOO vs VFIAX

VOO vs VFIAX Fees

The management fees of both of these funds are slightly different. You have to keep in mind that after 20 to 30 years they can charge a substantial sum of your earnings.

Moreover, the 2% doesn’t look like much to you but in the long term might be possible that this will eat up your goals by charging half of your earning value.

You have already heard that VOO and VFIAX have very low fees, Voo will charge 0.03% and VFIAX will charge you an expense ratio of 0.04%which is affordable for almost every single person.

Performance Differences: VOO vs VFIAX

Let’s talk about the performance of both of these forms of funds and many of their perspectives will be the same.

Categories VOO VFIAX
YTD Returns
18.37%
18.37%
1-Year Return
18.37%
18.37%
5-Year Return
15.19%
15.18%
3-Year Return
14.14%
14.14%
10-Year Return
13.84%
13.85%
SEC Yield
1.51%
1.50%
Since inception
15.03%
7.28%

Is VOO Better Than VFIAX?

It depends on who you are asking and in what you want to invest, if you want to invest in VFIAX then you need at least $3,000 investment this is its basic requirement of investment. On the other hand, if you are going to invest in VOO then you don’t need any fixed minimum investment to be its user, you can even start from $1 also. If you don’t have enough time to wait until $3,000 then you can go for VOO without wasting your further time. And both of these platforms are charging very low fees, VOO is charging 0.03% and on the other hand, VFIAX is charging 0.04%.

How is VOO different from VFIAX?

Both of them are almost the same as they are investing in the same shares with S&P 500 as their base.

Is VFIAX Good To Buy?

VOO vs VFIAX: Which is good to buy

If you are waiting for a perfect time in the market then it will never be going to be in your favor because of its unpredictability. So if you are waiting for things to get better to invest you are wasting your worthy time. VOO vs VFIAX is one of the most searched topics in recent days which shows how people are curious to know about these funds.

If you want to invest in VFIAX then just go for it right now, might be possible that it would be the right time for you to invest. The thing is you need to have at least $3,000 to invest in these funds. If you can afford it then just invest without waiting for the right time.

Is It Good To Invest In VOO?

As we have told you that if you want to invest in VFIAX then you have to invest a handsome amount but on the other hand if you want to become a VOO user then you don’t need a single penny as the fixed amount of investment. You can even start from 1$ then after completing $3,000 you will be able to convert these shares with VFIAX. We are here just to guide you towards the right way through which you can make your investment more fruitful and can also share this knowledgeable conversation with your loved ones who need any guidance about VOO vs VFIAX.

Conclusion

In recent days all of you guys were curious to know about VOO vs VFIAX to know which platform is the most satisfactory for your investment. And especially those people who want to make their retirement more fruitful.

Both VOO and VFIAX are created by the same platform which means that most of their functionalities are the same but only a few of them are different which we have already discussed.

We are providing all of this information after a deep analysis, so it’s a suggestion for you people that if you will invest with any of these funds then it will be your best decision to make your future more secure.

The investment criteria of both of these platforms are different, if you want to invest in VFIAX then you need at least $3,000 to invest, but in reverse, if you will prefer Voo for your investment then you don’t need any kind of the fixed investment amount, you can even start from $1 also.

Another most important thing is that you don’t need to be worried about any kind of loss because both of these platforms are related to the most nominated companies in the US which will make you believe more firm that you will never be going to face any loss.

We hope that your most confusing topic VOO vs VFIAX has been cleared but in the end, it’s all upon you because it’s only you who have the right to choose good or bad for yourself.