Stop Trying to Beat the Market: This Vanguard ETF Outperforms 90% of Professional Fund Managers

1 hour ago 2

David Dierking, The Motley Fool

Sat, May 30, 2026 astatine 3:35 PM CDT 3 min read

Trying to outperform the banal marketplace during immoderate azygous calendar twelvemonth usually has little than a 50% occurrence rate. Stretch that retired to a play of aggregate years, and the occurrence complaint gets adjacent worse. Over the emblematic 10-year concern period, it's astir not adjacent worthy trying.

According to the latest SPIVA U.S. Scorecard, published doubly a twelvemonth by S&P Dow Jones indexes, the underperformance complaint for actively managed large-cap funds exceeds 90% implicit a 15-year clip frame.

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This is however exchange-traded funds (ETFs) experienced their large boom. By paying razor-thin disbursal ratios connected passively managed scale funds alternatively of paying fees that often transcend 1% connected actively managed funds, investors could support much show for themselves alternatively of sending it to a fiscal advisor.

That logic inactive applies. Why wage large fees to precise apt underperform the S&P 500 (SNPINDEX: ^GSPC) erstwhile you tin simply effort to lucifer it instead? That's wherefore investors should halt trying to bushed the S&P 500. Just bargain the Vanguard S&P 500 ETF (NYSEMKT: VOO) instead.

Why the Vanguard S&P 500 ETF works truthful good

The biggest diagnostic of the Vanguard S&P 500 ETF is its simplicity. It replicates the S&P 500 scale and charges a minimal 0.03% disbursal ratio for doing so. What investors extremity up getting is wide vulnerability to the large-cap U.S. banal marketplace astatine astir nary cost.

Actively managed communal funds often complaint 1% oregon much successful absorption fees. That straight eats into shareholder returns and is the azygous biggest crushed they underperform implicit the agelong term. Actively managed ETFs are amended successful fees. Many complaint fractional that oregon less, but it's inactive a perchance unnecessary show drag.

The Vanguard S&P 500 ETF allows investors to support astir everything their concern earns. It's astir arsenic adjacent to replicating the show of the scale with minimal interest resistance arsenic you'll get.

VOO Metric

Value

Assets nether management	$974 billion
Expense ratio	0.03%
One-year full return	+31.2%
Five-year full instrumentality (annualized)	+14%
Dividend yield	1.1%
Top sectors	Tech (35%), financials (12%), connection services (11%)
Top holdings	Nvidia (7.9%), Apple (6.5%), Alphabet (6.5%), Microsoft (4.9%)