Key Points
Most active fund managers can’t consistently beat the S&P 500.
It might be smarter to invest in the entire S&P 500 through VOO.
- 10 stocks we like better than Vanguard S&P 500 ETF ›
$100 might seem like pennies in the stock market, especially when many stocks cost hundreds or thousands of dollars per share. However, a $100 monthly investment in the Vanguard S&P 500 ETF (NYSEMKT: VOO), a boring ETF pegged to the S&P 500, could easily grow to more than $20,500 over the next decade. Here's how that math works out.
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The S&P 500 has generated an average annual return of roughly 10% since its inception in 1957. Let's assume that trend continues over the next ten years, and you contribute $100 to VOO at the end of each month. By the end of the ten years, you'd have earned roughly $8,500 in unrealized gains from your underlying investment of $12,000. By comparison, the same contributions to a savings account with a 3% yield would only have grown to $13,950.
VOO gives investors instant exposure to the entire S&P 500, which is rebalanced every quarter to include the most prominent U.S. companies. It also charges a low expense ratio of 0.03%, since it's passively managed and automatically tracks the index. Since roughly 90% of active fund managers can't consistently beat the S&P 500 over long periods, it's smarter to simply invest in the entire market instead of trying to beat it with individual stock picks.
Should you buy stock in Vanguard S&P 500 ETF right now?
Before you buy stock in Vanguard S&P 500 ETF, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Vanguard S&P 500 ETF wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $414,554!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,120,663!*
Now, it’s worth noting Stock Advisor’s total average return is 884% — a market-crushing outperformance compared to 193% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
*Stock Advisor returns as of February 16, 2026.
Leo Sun has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Vanguard S&P 500 ETF. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
