How to Invest in Vanguard S&P 500 ETF

How to buy Vanguard S&P 500 ETF

It's very easy to invest in the Vanguard S&P 500 ETF. You can buy shares directly from Vanguard or in your regular brokerage account. Here's a step-by-step guide to buying shares of the ETF.

1. Open your brokerage app: Log in to your brokerage account where you handle your investments.
2. Search for the stock: Enter the ticker or company name into the search bar to bring up the stock's trading page.
3. Decide how many shares to buy: Consider your investment goals and how much of your portfolio you want to allocate to this stock.
4. Select order type: Choose between a market order to buy at the current price or a limit order to specify the maximum price you're willing to pay.
5. Submit your order: Confirm the details and submit your buy order.
6. Review your purchase: Check your portfolio to ensure your order was filled as expected and adjust your investment strategy accordingly.

Holdings of Vanguard S&P 500 ETF

The Vanguard S&P 500 ETF tracks the S&P 500. The broad market index holds roughly 500 of the largest publicly traded companies in the U.S. (it had 505 stocks in mid-2025). The index weighs its holdings based on their market caps. That means companies with larger market caps have a greater impact on the index.

As of mid-2025, the Vanguard S&P 500 ETF's top 10 holdings were:

1. Apple (AAPL -0.83%): 7% of the fund's holdings
2. Microsoft (MSFT +1.01%): 5.9%
3. Nvidia (NVDA +0.91%): 5.6%
4. Amazon (AMZN +0.27%): 3.8%
5. Meta Platforms (META -1.81%): 2.7%
6. Berkshire Hathaway Class B (BRK.B -0.53%): 2.1%
7. Alphabet Class A (GOOGL +2.37%): 1.9%
8. Broadcom (AVGO +0.07%): 1.7%
9. Alphabet Class C (GOOG +2.44%): 1.6%
10. Tesla (TSLA -0.36%): 1.5%.

Those 10 stocks make up about one-third of this ETF's assets. So, while it provides broad exposure to the country's largest stocks, the biggest companies have a significant impact on its returns.

The Vanguard ETF, like the S&P 500, provides investors with diversified exposure to several stock market sectors. Its weighed sector exposure in mid-2025 was:

• Information technology: 29.7%
• Financials: 14.6%
• Health Care: 11.2%
• Consumer Discretionary: 10.3%
• Communication Services: 9.2%
• Industrials: 8.5%
• Consumer Staples: 6%
• Energy: 3.7%
• Materials: 2%
• Real Estate: 2.3%
• Utilities: 2.5%

Because it provides broad sector exposure, investors don't need to invest in sector ETFs unless they want to invest specifically in a particular industry.

Should I invest in Vanguard S&P 500 ETF?

Making any investment is a personal decision. You need to make sure it aligns with your goals, values, and risk tolerance. Here are some reasons you might want to invest in the Vanguard S&P 500 ETF:

• You're seeking an investment that can deliver returns that roughly match those of the S&P 500 index.
• You want a low-cost passive investment.
• You understand that while the Vanguard S&P 500 ETF provides market returns, it also has market risk with volatility that will match the S&P 500.
• You're seeking a diversified investment that provides broad exposure to the U.S. stock market.

On the other hand, here are some reasons the Vanguard S&P 500 ETF might not be right for you:

• You're seeking investments that can deliver higher returns than the S&P 500.
• You're a more risk-averse person and want an investment with lower volatility than the S&P 500.
• You're at or nearing retirement and need more income than the Vanguard S&P 500 ETF can produce.
• You're seeking an investment with less concentration among its top holdings.

Does Vanguard S&P 500 ETF pay a dividend?

The Vanguard S&P 500 ETF paid a dividend of roughly 1.3% in mid-2025 (approximating the S&P 500's dividend yield). The fund makes quarterly dividend income payments. While they will fluctuate from quarter to quarter based on the dividends received, payments have steadily risen over the years:

Although its low dividend yield might not make it one of the best dividend ETFs for income seekers, it does provide a market-matching and steadily rising dividend payment.

What is Vanguard S&P 500 ETF's expense ratio?

A low expense ratio is a hallmark of a Vanguard-managed fund. Since fund investors own the company, it can pass on its economies of scale and lower investment costs to them through a lower expense ratio, enabling fund investors to keep more of their returns.

The Vanguard S&P 500 ETF has an ultra-low expense ratio of 0.03%, significantly below the industry average of 0.22%. The low expense ratio enables investors to keep more of the fund's return.

For example, the management fees charged by Vanguard on a $10,000 investment in the Vanguard S&P 500 ETF would be only $3 per year. For comparison, a similar $10,000 investment in a fund charging 0.22% would cost $22 per year. That higher cost would add up over the years by eating into an investor's returns.

Historical performance of Vanguard S&P 500 ETF

The Vanguard S&P 500 ETF's goal is to closely track the average stock market return as measured by the S&P 500 index. It has delivered on its objective over the years:

FAQ