You’ve probably run across recommendations to buy into the Vanguard S&P 500 ETF (NYSEMKT: VOO) plenty of times. Even Warren Buffett has recommended low-fee S&P 500 index funds, citing Vanguard’s as a prime example. In his 2013 letter to shareholders, he wrote about his directions to his trustee for his eventual bequest to his wife:
Put 10% of the cash in short-term government bonds and 90% in a very low-cost S&P 500 index fund. (I suggest Vanguard’s.) I believe the trust’s long-term results from this policy will be superior to those attained by most investors — whether pension funds, institutions or individuals — who employ high-fee managers.
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What would $10,000 grow to in a decade in the S&P 500?
How well can you do with a mere S&P 500 index fund? Let’s take a look:
Source: Morningstar.com as of Sept. 3, 2026.
Not bad, right? If you plunked, say, $10,000 into this fund a decade ago, it would be worth $38,212 — or $41,688, if you’d reinvested dividends along the way.
All this is kind of misleading, though, because you should not be expecting annual gains of 15% or 20% from the S&P 500 every year. The past 15 years have been unusually strong for the stock market. Know that the S&P 500 has averaged annual returns closer to 10% (ignoring inflation) over many decades.
Don’t get discouraged about that 10%, though — because, according to the folks at S&P Dow Jones Indices, over the past 15 years, the S&P 500 index has outperformed a whopping 90% of managed large-cap mutual funds (as of the end of 2025).
What’s in the Vanguard S&P 500 ETF?
As you might have guessed, the fund encompasses about 500 stocks. Together, they make up about 80% of the total U.S. stock market’s value. So investing in this fund is a lot like investing in the overall American economy. Here are the recent top 10 holdings:
Source: Vanguard.com, as of July 31, 2026.
Should you invest in the Vanguard S&P 500 ETF?
Long-term investors in this fund are likely to do well.
