vig vs voo

VIG vs VOO – Best Vanguard ETF for Your Portfolio? (2022)

In this guide, we compare two of the most popular Vanguard ETFs – VIG vs VOO.

This guide will help investors decide which investment is better for their personal circumstances.

Regardless, both of these investment funds hold some very Undervalued Stocks that have rewarded investors in the long term.

VIG vs VOO – Full Comparison

Below you will find an in-depth comparison between VIG vs VOO. Both are popular Vanguard Index Funds.

VIG vs VOO - Full Comparison

VIG Description

VIG is Vanguard’s Dividend Appreciation ETF. Their website states the following about VIG:

“Seeks to track the performance of the S&P U.S. Dividend Growers Index.”

“Large-cap equity, emphasizing stocks with a record of growing their dividends year over year.”

VIG Description

VOO Description

VOO is a Vanguard ETF that tracks the S&P 500 index, which represents the 500 largest publicly-traded US companies.

According to Vanguard’s website, the goal of this fund is to closely track the S&P 500 index’s return, which is considered a gauge of overall U.S. stock returns.

As a result, it’s a diverse fund, with stocks from across all sectors.    

VOO Description

The video below provides a brief overview of these Vanguard investment funds.    

 

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VIG vs VOO – Dividend Reinvestment

Both VIG and VOO allow investors to reinvest their dividend income. Because VIG has a heavier focus on value firms, they have a higher dividend yield.

This is because value companies provide consistent cash flow and prefer to pay their shareholders quarterly dividends.

This is different than VOO, which has a larger focus on growth companies. Growth companies put their cash towards research and development instead of dividend payouts.

VIG and VOO both allow automatic investments and withdrawals. That is, if you’d like to automatically invest a certain amount each week or month, you can do so with either product.

Currently, VIG has a greater dividend yield as of this writing.  

VIG vs VOO - Dividend Reinvestment

VIG vs VOO – Minimum Investment

Because both VIG and VOO are ETF products, the minimum investment is one share.

For example, you cannot buy partial shares in either fund like you can for index funds. Thus, whichever fund is currently trading at a lower share price will have a lower minimum investment.

This will fluctuate across time, so neither product offers any distinct advantage over the other in this category.

It’s extremely common for popular mutual funds to require a minimum investment, ranging from $1,000 to $50,000 for admiral shares at Vanguard.

Liquidity and Day Trading

Liquidity and Day Trading

Both VIG and VOO have access to real-time pricing. This means during market hours, you will receive a price quote per share.

Real-time pricing helps increase liquidity. High liquidity is a way to increase the price because it expands the pool of available investors.

Lastly, strong liquidity is imperative for properly implementing a day or swing trading strategy.

We do not recommend day trading as an investment strategy, but it has made some people fabulously rich.

There’s a reason the best investors are dead. Long-term investors typically hold index funds diversified across various sectors.

Best Vanguard Index Funds
Best Fidelity Index Funds  

vig vs voo investment holdings

Investment Holdings

So, you may be asking, “What are the underlying holdings for VIG and VOO?”

VIG holds large-cap companies that pay above-average dividend yields, while VOO holds S&P 500 companies.

Below are the major holdings for VIG:  

VIG Holdings

VIG Holdings

The main investment holdings within the VOO fund include:  

VOO Holdings

VOO Holdings

You notice that VOO is very heavy in the growth sectors of electric vehicles, space exploration, 5G, robotics, carbon capture, and more. VIG on the other hand is heavy in value firms.

VIG Pros

Some of the benefits to investing in the VIG fund include the following:

  • Low expense ratio of 0.06%
  • Above-average dividend yield 
  • Vanguard product

VIG Cons

Some of the downsides to VIG include:

  • Little exposure to growth companies
  • Higher risk potential
  • Can’t purchase partial shares on Vanguard

VOO Pros

The VOO ETF is one of Vanguard’s fastest-growing funds. Here are a few of its benefits:

  • Good historical performance over the past several years
  • Low, 0.03% expense ratio
  • Exposure to innovative tech companies
  • Vanguard product

VOO Cons

Vanguard’s funds are not perfect. Here are a couple of reasons you might not want to invest in VOO:

  • Lower dividend yield compared to VIG
  • Cannot purchase partial shares on Vanguard
  • No exposure to small-cap companies

Other Fund Comparisons

I have written many other investment fund comparison reviews. I highly recommend reading any of the following for more information.

Vanguard, Fidelity, and Schwab have thousands of fund choices, and you should subscribe to their newsletters! They have easy-to-understand content for investors at any level.

VIG vs VOO – Final Thoughts

Both VIG and VOO are investing in large companies in the United States. 

VIG focuses on value companies while VOO is more focused on growth. 

The biggest differences are the investment holdings, dividend yields, and historical performances.

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VIG vs VOO FAQ

What’s the Difference Between VIG vs VOO?

VIG is Vanguard’s Dividend Appreciation ETF and VOO is Vanguard’s S&P 500 ETF.

Is VIG or VOO Better?

Neither fund is necessarily better, as preference will depend on an investor’s circumstances. VIG is more of a value play while VOO is focused on growth.

What are the Holdings of VIG and VOO?

VIG holds large-cap companies in the US with larger dividend yields. VOO holds companies within the S&P 500 index.

How do I Buy VIG or VOO?

You can buy both VIG or VOO on any brokerage website such as Vanguard, Robinhood, Fidelity, M1 Finance, and others.