Key Points

The Vanguard S&P 500 ETF recently exceeded $1 trillion of assets, making it easily the largest ETF.
This low-cost index fund has delivered a 15.2% annualized return since its inception in September 2010.
10 stocks we like better than Vanguard S&P 500 ETF ›

Vanguard's flagship S&P 500 exchange-traded fund reached a major milestone on Wednesday. According to Bloomberg data, the Vanguard S&P 500 ETF (NYSEMKT: VOO) just passed $1 trillion in net assets. This makes it the first ETF in history to pass the $1 trillion mark. The fund has received more than $69 billion of inflows so far in 2026, according to Bloomberg's analysis.

Having $1 trillion in assets does not mean the Vanguard S&P 500 ETF is better than or guaranteed to outperform other ETFs. But reaching $1 trillion of assets in the fund is an impressive achievement. It shows just how popular and essential this ETF has become for millions of everyday stock market investors.

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Let's see why the Vanguard S&P 500 ETF became popular enough to attract $1 trillion of investors' savings -- and whether you should buy it, too.

Image source: Getty Images.

Vanguard S&P 500 ETF (VOO): 15 years of 15.2% annualized returns, 0.03% expense ratio

The Vanguard S&P 500 ETF will never beat the S&P 500. That's because it holds the same stocks as the S&P 500 index and tracks its performance. When you buy this ETF, you will receive (almost) exactly the same return as the S&P 500.

Many individual stocks and other funds fail to beat the S&P 500. Just earning that S&P 500 return (which has averaged 9.92% per year since 1928) is a good accomplishment for most investors. The Vanguard S&P 500 ETF was established in September 2010, and since then, it has delivered average annual returns of 15.18%. If you had invested $10,000 in this ETF on the day of its inception and left that money alone to grow for more than 15 years, today you'd have $91,670.

VOO Total Return Level data by YCharts.

This fund's expense ratio is one of the lowest in the investment industry: 0.03%. Simply put, this is one of the best S&P 500 ETFs. It's low-cost, highly liquid (with average daily trading volume of 5.97 million shares), and one of the easiest and most popular ways to buy the stocks of the 500 largest publicly traded U.S. companies, all in one ticker.

Why buy Vanguard S&P 500 ETF -- or not

This popular ETF is a broadly diversified low-cost index fund. It ranks as one of the best Vanguard ETFs, and it's a good choice as a core foundational piece of many investors' portfolios. If you buy the Vanguard S&P 500 ETF, you get 505 stocks, with top sector holdings (as of April 30) of information technology (35% of the fund), financials (12%), communication services (11%), consumer discretionary (10%), and industrials (8.8%).

One concern some investors might have is that the S&P 500 index has become too top-heavy with major tech names. This isn't decided by the Vanguard fund; it's a passive fund that changes its holdings as stocks rise and fall within the S&P 500. But just like the benchmark index, this fund's top five holdings (as of April 30) are all tech names:

Nvidia: 7.85% of the fund
Alphabet: 6.5% combining Class A and Class C shares)
Apple: 6.45%
Microsoft: 4.9%
Amazon: 4.2%

Out of the top 10 holdings, nine are tech stocks and artificial intelligence (AI) stocks. (The 10th is Berkshire Hathaway.) Those top 9 stocks account for 37% of the fund. If the AI boom turns into a tech downturn, this ETF might also lose value. If you worry that this S&P 500 ETF is not diversified enough, you might want to look at adding some other funds to your portfolio, like dividend stocks, bond funds, or international stocks.

Should you buy stock in Vanguard S&P 500 ETF right now?

Before you buy stock in Vanguard S&P 500 ETF, consider this:

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Ben Gran has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet, Amazon, Apple, Berkshire Hathaway, Microsoft, Nvidia, and 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.