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Anonymous
Which is better to invest in and why?
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Shengshi Chiam, CFA
26 Apr 2020
Personal Finance Lead at Endowus
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I came across this article (https://fourpillarfreedom.com/voo-vs-voog-vs-vo...) - by no means a form of validation for its content and past results may not be an indicator of future performance.
Comparing VOO and VOOG over the past 10 years,
VOO
lower expense ratio ~0.03%
larger no. of stocks ~500
higher dividend yield ~2%
lower annualised returns ~12.6%
VOOG
higher expense ratio ~0.15%
few no. of stocks ~300
lower dividend yield ~1.4%
higher annualised returns ~14%
It is pretty difficult to nail down on which is better, and the results above is only for the past 10 years. If we were to shift the time frame further back or an even longer time frame, the results would differ. Hence it is very subjective and dependent on one's investment objective - growth stocks may provide a greater potential upside but one must be able to stomach the higher volatility.
Overall, both options are good but it is tough to say which one is better.
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If you are looking at VOOG, you may want to consider VUG instead, as VUG has a lower expense ratio....
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You should choose irish domiciled ETFs, and save on the dividend withholding tax.
This is especially important for long term buy and hold investors, as the taxes eat into your returns and thinner bid-ask spread is less critical. You can read more here.
https://endowus.com/insights/an-inconvenient-tr...
Traders will appreciate the thinner bid-ask though