VOOG and VOO

@therondalal

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VOOG

Why it worked

The video provides a clear, data-driven comparison between two popular investment vehicles, directly addressing a common question investors have. The use of visual aids like charts and tables, combined with a concise explanation of the tradeoff, makes the information easily digestible and valuable.

Summary

This video compares two Vanguard ETFs, VOOG and VOO, both tracking the S&P 500. It highlights that VOOG, focused on growth stocks, has outperformed VOO over the last 10 years, but comes with higher concentration and risk. The video suggests VOO for beginners and VOOG for those seeking growth exposure, cautioning against holding both due to overlap.

Structure

1Introduction of VOOG and VOO as Vanguard ETFs tracking S&P 500
2Comparison of 10-year performance, showing VOOG's higher returns
3Explanation of VOOG's focus on growth stocks and its components
4Discussion of the tradeoff: concentration and higher risk in VOOG

Original caption

VOOG and VOO are both from Vanguard. Both connected to the S&P 500. Over the last 10 years: VOOG returned 17.65% per year. VOO returned 15.23% per year. On $10,000 held for 10 years that gap is roughly $15,000 more with VOOG. The tradeoff: VOOG is more concentrated and falls harder in bad years. #investing #voo #voog #PersonalFinance

More from @therondalal

Product placement

The video discusses and compares two Vanguard ETFs: VOOG (Vanguard S&P 500 Growth ETF) and VOO (Vanguard S&P 500 ETF). It shows their logos, performance data, and mentions key holdings like Nvidia, Apple, and Microsoft within VOOG.

Call to action

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On-screen text

VOOG VANGUARD VOO VANGUARD S&P 500® VOOG Growth Vanguard S&P 500 ETF Product summary Invests in stocks in the S&P 500 Index, representing 500 of the largest U.S. companies. Goal is to closely track the index's return, which is considered a gauge of overall U.S. stock returns. Offers high potential for investment growth; share value rises and falls more sharply than that of funds that track broader market indexes. More aggressive than funds that hold 10% of the stocks in the fund, and 10% of the fund's assets are in the top 10 companies. VOO Vanguard S&P 500 ETF Product summary Invests in stocks in the S&P 500 Index, representing 500 of the largest U.S. companies. Goal is to closely track the index's return, which is considered a gauge of overall U.S. stock returns. Offers high potential for investment growth; share value rises and falls more sharply than that of funds that track broader market indexes. More aggressive than funds that hold 10% of the stocks in the fund, and 10% of the fund's assets are in the top 10 companies. NVIDIA Apple Microsoft VOOG VOOG 10 YEAR INVESTMENT COMPARISON INVESTMENT DETAIL VOO VOOG Investment $10,000 $10,000 Time 10 Years 10 Years Est. Annual Return 15.23% 17.65% After 10 years ~$41,300 ~$56,300 VOOG Extra Value +$15,000 VOO VOOG QQQM VGT

Transcript

VOOG and VOO are both from Vanguard. Both connected to the S&P 500. Over the last 10 years: VOOG returned 17.65% per year. VOO returned 15.23% per year. On $10,000 held for 10 years that gap is roughly $15,000 more with VOOG. The tradeoff: VOOG is more concentrated and falls harder in bad years. VOOG tracks all 500 companies within the large cap universe. You get a steady, balanced version of the US stock market. VOOG, G stands for growth or might not track stocks the S&P 500 pulls out with the momentum and revenue growth. Nvidia, Apple, and Microsoft make up a bigger slice of VOOG than they do of VOO. It's not 500 companies, it's closer to 230 all tilted towards growth. Now let's look at the performance over the last 10 years. VOOG returned about 17.65% per year. VOO returned 15.23% per year. On a $10,000 investment held for 10 years, that difference comes out to $15,000 more with VOOG. But the tradeoff is concentration. VOO has an expense ratio of 0.03% and VOOG charges around 0.07%. Still cheap, but more than double of VOO. And because VOOG is concentrated in growth stocks, when growth gets hit hard, it gets hit harder. I think in 2022 when interest rates rose suddenly, growth stocks took the biggest hit. So who is VOOG for? Someone who already understands that they are concentrated on a concentrated bet on the growth side of the market and can hold steady when that bad year is just getting. If you are just getting started, VOO first. If you don't have VOO and you're considering a growth layer, VOOG is one of the cleaner ways to do it. But remember, holding VOO and VOOG will have a lot of overlap, so I would not recommend doing both. Are you a VOO investor, a VOOG investor, or do you hold something like QQQM or VGT?