Latest news with #VanguardS&P500ETF
Yahoo
a day ago
- Business
- Yahoo
3 Reasons Why Vanguard's Worst-Performing ETF in 2025 May Be Worth Buying in June
The Vanguard Small-Cap 600 Value ETF contains hundreds of companies. The fund is not top-heavy, which protects against concentration risk. The ETF sports a dirt cheap valuation along with a high yield. 10 stocks we like better than Vanguard Admiral Funds - Vanguard S&P Small-Cap 600 Value ETF › Investment management firm Vanguard Group has over 90 exchange-traded funds (ETFs), many of which offer low-cost fees. The worst-performing in 2025 is the Vanguard Small-Cap 600 Value ETF (NYSEMKT: VIOV) -- which is down just over 12% year to date at the time of this writing. Here are three reasons why the beaten-down ETF may be worth buying now and one factor that may make it worth passing on. The fund includes 460 holdings with a median market capitalization of just $2.3 billion. This is a far different approach than funds that concentrate on just a handful of holdings. Even the Vanguard S&P 500 ETF (NYSEMKT: VOO), which mirrors the performance of the S&P 500, has over 35% of its holdings in just 10 companies. No single company in the Vanguard Small-Cap 600 Value ETF has more than a 1.1% weighting. Top holdings include semiconductor company Qorvo, medical device company Teleflex, auto parts company BorgWarner, mortgage lender Mr. Cooper Group, and insurance company Jackson Financial, among others. Many of these companies are hardly household names, but their hidden-gem nature could appeal to value investors looking for exposure to companies they don't already own. One of the most appealing attributes of the Vanguard Small-Cap 600 Value ETF is that it is spread out across stock market sectors. And the sectors it concentrates on tend to be more value-oriented. Here's a look at how its sector concentration stacks up against the Vanguard S&P 500 ETF. Sector Vanguard Small-Cap 600 Value ETF Vanguard S&P 500 ETF Financials 23.9% 14.4% Industrials 15.5% 8.5% Consumer discretionary 13.8% 10.4% Information technology 10% 30.4% Healthcare 8.2% 10.8% Real estate 7.5% 2.2% Materials 6.4% 2% Utilities 4.1% 2.6% Consumer staples 3.9% 6.2% Energy 3.6% 3.2% Communication services 3.1% 9.3% Data source: Vanguard. The composition of the Vanguard Small-Cap 600 Value ETF is nothing like the S&P 500, which may interest folks looking for more exposure to value-focused and cyclical sectors like financials and industrials and less exposure to growth-focused sectors like tech. What stands out the most about the Vanguard Small-Cap 600 Value ETF compared to the Vanguard S&P 500 ETF is valuation. The small-cap value-focused ETF sports a mere 13.7 price-to-earnings (P/E) ratio and a 2.2% dividend yield compared to a 25.9 P/E ratio and 1.4% yield for the Vanguard S&P 500 ETF. Granted, small-cap stocks arguably deserve to trade at a discount to their large-cap peers because large-cap companies have numerous advantages over smaller companies. For example, Microsoft benefits from its size and exposure to multiple end markets across hardware, software, gaming, cloud computing, artificial intelligence, and more. These advantages give Microsoft network effects, meaning more customers who buy into Microsoft's software suite, use tools like GitHub, or join Microsoft Cloud, benefit Microsoft by making these products and services widespread. Network effects support pricing power and lead to margin expansion, which allows Microsoft to grow profits faster than sales and support a growing stock buyback program and dividend. This snowball effect is powerful when compounded over a multiyear time frame. Many small-cap companies simply don't have these advantages and must work much harder to compound in value. Microsoft is the largest company by market cap in the world, so it is a key holding in the S&P 500, Nasdaq Composite, Dow Jones Industrial Average, and many growth-focused funds. It's the kind of stock that can have a high weighting in an ETF, and therefore, play into an investment thesis. But the Vanguard Small-Cap 600 Value ETF contains no such companies. The Vanguard Small-Cap 600 Value ETF could be a useful tool for investors looking to put new capital to work in the market and generate passive income from stocks they don't already own. But there is a glaring disadvantage of the fund compared to other Vanguard ETFs like the S&P 500 ETF, Vanguard Growth ETF, Vanguard Value ETF, or even the Vanguard Dividend Appreciation ETF. The small-cap value ETF lacks leadership -- making it difficult to build an investment thesis around companies. With investing, it's important to know what you own and why you own it -- and that applies to individual stocks and ETFs. Even though the S&P 500 ETF contains over 500 components, it's still possible to get a decent grasp of the companies that drive the fund by looking at the top 20 or so holdings. But that's not the case with the Vanguard Small-Cap 600 Value ETF because the fund is ultra-diversified. Again, this structure may appeal to investors looking for general exposure to small-cap value stocks in key sectors like industrials and financials -- but it may not be the best choice for folks looking to build a portfolio around companies they are confident can grow over time. Before you buy stock in Vanguard Admiral Funds - Vanguard S&P Small-Cap 600 Value ETF, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Vanguard Admiral Funds - Vanguard S&P Small-Cap 600 Value ETF wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $674,395!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $858,011!* Now, it's worth noting Stock Advisor's total average return is 997% — a market-crushing outperformance compared to 172% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of June 2, 2025 Daniel Foelber has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Microsoft, Teleflex, Vanguard Dividend Appreciation ETF, Vanguard Index Funds-Vanguard Growth ETF, Vanguard Index Funds-Vanguard Value ETF, and Vanguard S&P 500 ETF. The Motley Fool recommends BorgWarner and Qorvo and recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy. 3 Reasons Why Vanguard's Worst-Performing ETF in 2025 May Be Worth Buying in June was originally published by The Motley Fool Sign in to access your portfolio
Yahoo
2 days ago
- Business
- Yahoo
Here's How Often Warren Buffett Has Outperformed the S&P 500 -- and What It Means for Your Investing Strategy
Warren Buffett's Berkshire Hathaway has delivered a 19% compound annual gain over 59 years, building a $258 billion portfolio. A few key investing principles drive Buffett's success -- and anyone can adopt them. 10 stocks we like better than S&P 500 Index › Warren Buffett is one of the greatest investors of our time, building a portfolio that topped $258 billion as of the end of the latest quarter. The billionaire's known for identifying quality companies and getting in on them when they're trading at reasonable, and sometimes even dirt cheap, levels. This strategy has worked, helping Buffett, as chairman, guide Berkshire Hathaway to a compound annual gain of more than 19% over 59 years. With this performance, Buffett beat the S&P 500 (SNPINDEX: ^GSPC), which delivered a 10.4% compound annual increase during that time period. Considering this, it's perfectly logical that investors turn to Buffett for investing inspiration -- he's proven his expertise in the field. By tracking his buys, sells, and holdings, we surely can discover specific stocks to add to our portfolio, and understand when and why it may be a good idea to sell a particular player. Looking at how often Buffett has outperformed the S&P 500 can tell us something important, too. Let's take a look at how often this investing giant has beaten the benchmark and what it means for your investing strategy today. First, it's important to note that Buffett, though he's outperformed the S&P 500, is a fan of this index and thinks it's a great idea to bet on it as a whole. Buffett himself, in recent years, owned two funds that track the benchmark's performance -- the Vanguard S&P 500 ETF and the SPDR S&P 500 ETF Trust -- and even recommends that one of the best ways for the non-professional investor to succeed is to hold one of these funds. The S&P 500, since its inception as a 500-company index, has delivered an average annual return of 10% -- a pretty impressive track record. But Buffett, as a savvy investor, also is known for his ability to pick a good stock and hold on to it throughout its growth story. This has supercharged his portfolio over the years. The chart below shows how many times per decade Buffett's Berkshire Hathaway has outperformed the S&P 500. Each decade, Buffett beat the benchmark at least six years -- and during one period he even outperformed in eight out of 10 years. In total, he's topped the S&P 500 40 out of 60 years. Now, let's consider how this relates to your investing strategy. It's important to note that Buffett's success over the years is due to holding on to stocks for the long term. He's spoken extensively on the subject, and one of my favorite quotes is the following: "I never attempt to make money on the stock market," Buffett once said. "I buy on the assumption that they could close the market the next day and not reopen it for five years." So, Buffett has generated his market-beating gains thanks to picking quality stocks, paying reasonable prices, and holding onto these players for many years. This long-term focus is key. You could pick up a fantastic stock right now for a bargain, but it may not take off right away. In fact, it might even decline, and if you're impatient and sell, you could lose or at best end up breaking even. In another scenario, this recent buy may advance, and you might sell to lock in a profit. It's great that you won on the investment, but if the company has strong future prospects, your win could have been even bigger if you'd held on for a few years. Of course, it's essential to choose the right stocks -- quality companies with competitive advantages and strong financial situations. But it can be difficult to gain even with these promising players if you shift in and out of them after a period of weeks or months. Buffett's frequent outperformances are linked to lengthy commitments to his stock picks -- and this focus on the long term could make a crucial difference in your investing strategy, too. Before you buy stock in S&P 500 Index, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and S&P 500 Index wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $674,395!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $858,011!* Now, it's worth noting Stock Advisor's total average return is 997% — a market-crushing outperformance compared to 172% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of June 2, 2025 Adria Cimino has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Berkshire Hathaway and Vanguard S&P 500 ETF. The Motley Fool has a disclosure policy. Here's How Often Warren Buffett Has Outperformed the S&P 500 -- and What It Means for Your Investing Strategy was originally published by The Motley Fool Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Economic Times
2 days ago
- Business
- Economic Times
Warren Buffett shifts gears: Dumps two major stocks, pours billions into Consumer Staples, here's why
Tired of too many ads? Remove Ads Exit from S&P 500 ETFs Reduction in Financial Sector Holdings Tired of too many ads? Remove Ads Increased Investment in Consumer Staples Market Implications FAQs Did Warren Buffett change his stance on index funds? Why did Berkshire exit the S&P 500 ETFs? Tired of too many ads? Remove Ads In a strategic shift reflecting caution towards current market conditions, Warren Buffett's Berkshire Hathaway has divested from two prominent U.S.-based investments, signaling a reevaluation of its investment Hathaway has fully exited its positions in the Vanguard S&P 500 ETF (VOO) and the SPDR S&P 500 ETF Trust (SPY), selling shares worth approximately $22 million each. These ETFs, which track the S&P 500 index, have been long-standing recommendations by Buffett for individual investors due to their broad market exposure and low this move, Buffett's endorsement of index funds for individual investors remains unchanged. The decision to sell these holdings, which constituted a minor portion of Berkshire's extensive portfolio, is viewed by analysts as a routine portfolio adjustment rather than a shift in investment philosophy. In addition to the ETF sales, Berkshire Hathaway has significantly reduced its stakes in several major financial institutions. The conglomerate cut its holdings in Bank of America by 14.7%, Citigroup by 73.5%, and Capital One Financial by 18.1%. Furthermore, it completely exited its position in Ulta Beauty. These adjustments suggest a strategic realignment of Berkshire's investment portfolio, possibly reflecting concerns about the financial sector's performance amid economic its divestments, Berkshire Hathaway has initiated a substantial investment in Constellation Brands, acquiring 5.6 million Class A shares valued at approximately $1.2 billion. Constellation Brands is known for its portfolio of alcoholic beverages, including popular beer brands like Modelo and move indicates a strategic pivot towards consumer staples, sectors traditionally considered more resilient during economic Hathaway's recent portfolio adjustments, including the liquidation of S&P 500 ETFs and a reduction in financial sector holdings, have raised questions among investors about potential market analysts suggest that these moves are consistent with Buffett's long-term investment strategy and do not necessarily indicate an anticipation of a market company's increased investment in consumer staples further underscores a cautious yet strategic approach to navigating current market the divestment from certain assets may prompt investor scrutiny, the underlying strategy appears aligned with Berkshire Hathaway's long-term investment While Berkshire Hathaway sold its ETF holdings, Buffett still endorses index funds for individual sales were minor relative to its portfolio and are viewed as routine rebalancing rather than a philosophical shift.
Yahoo
3 days ago
- Business
- Yahoo
Is the Vanguard S&P 500 ETF Index Fund a Buy Now?
The Vanguard S&P 500 ETF remains one of the best ways to match American stock market returns with minimal fees. June 2025 may or may not be a great time to invest in the stock market, but you might as well get started. The biggest investment mistake is staying out of the market forever while waiting for ideal conditions that may never arrive. 10 stocks we like better than Vanguard S&P 500 ETF › The Vanguard S&P 500 ETF (NYSEMKT: VOO) is arguably the best way to match the returns of the American stock market. It's one of the three largest exchange-traded funds (ETFs) based on the popular S&P 500 (SNPINDEX: ^GSPC) market index, which reflects the performance of 500 top-quality domestic companies. The fund's annual fees are minimal. The Vanguard group behind the scenes was built around the investor-friendly policies of founder John Bogle. If you want to follow the broader market, the Vanguard S&P 500 ETF is always a great place to start. But there's a more general question in play here. Is this the time to get into the stock market, in the first place? Let me show you why the answer is "yes," no matter what you think the stock market might do in 2025 or over the next couple of years. You may not want to go all-in with a large purchase today, but this moment is as good as any other to start a new Vanguard S&P 500 ETF position -- slowly. First and foremost, I can't tell you exactly what the stock will do over the summer of 2025. There are tons of conflicting opinions on this matter -- probably more than usual. Hedge funds are reportedly buying lots of promising tech stocks right now, suggesting a bullish market outlook in this group. At the same time, bearish short-selling activity is on the rise and many market watchers expect a full-fledged recession amid the Trump administration's unpredictable tariffs. So the stock market might be falling off a cliff, or preparing for a majestic surge. The real outcome probably lies between these extremes. Trying to time the market in this erratic economy sounds like a terrible idea. In all fairness, the starting price for any investment can make a significant difference to your long-term results. If you invested $3,000 in an S&P 500 index fund at the start of 2008, you'd have a total return of $16,970 by June 2, 2025. But if you saw stocks trading at unreasonable valuations at back then, and held off on making that $3,000 investment until early 2009 instead, your account would show a total return of $26,940 instead. The S&P 500 dipped as much as 48% lower in the subprime mortgage crisis. It's still a game-changing over 17 or 18 years, but of course I'd rather have a compound annual growth rate (CAGR) of 14.3% than 10.5%. Most people didn't see that crash coming, though. Trading volumes soared when the Lehman Bros. firm went out of business, but cooled down as the financial meltdown continued. In a perfect world, more investors would be eager to buy great stocks at temporary discounts, thereby boosting the daily trading volumes. The opposite scenario unfolded instead. And most people will mistime the next economywide market crash, too. It's one thing if you really do see clear signs of some unavoidable market trend, like the soaring home prices of the early 2000s or the skyrocketing average price-to-earnings ratios just before the dot-com bubble popped. It's fine to keep your cash on Wall Street's sidelines when you expect a downturn fairly soon. Otherwise, you should consider putting your money to work over time. Buying in thirds is one simple approach to unpredictable markets. Divide your investable cash in three equal buckets (metaphorically speaking, of course). Then you buy your favorite asset in three equal portions, stoically looking away from the price charts to place those pre-planned trades no matter what. The three portions may be a month apart, or a year, or any other schedule that makes sense in your situation. The important part is that you make a plan that works with your budget, and you stick to it whether stock prices go up or down in the meantime. Let's say you used this method around the subprime mortgage panic of 2008, starting at the beginning of that year with a six-month pause between your Vanguard S&P 500 ETF purchases. This is how the three buys would have worked out in the long run: Date of ETF Purchase Original Investment Total Return By 6/2/2025 1/1/2008 $1,000 $5,658 7/1/2008 $1,000 $6,398 1/1/2009 $1,000 $8,981 Total Results $3,000 $21,037 Calculated from YCharts data on 6/2/2025. As expected, these hypothetical returns would fall short of a single perfectly timed buy-the-dip purchase, but they're also much better than the worst-case scenario of making a big buy just before a terrible market drop. The CAGR for this thought experiment would be roughly 12.1%. Maybe you already have a solid investing strategy in mind. Congratulations -- you're ahead of the game and should continue with your chosen plan. Don't be distracted by blaring headlines along the way, but feel free to take advantage of unexpected opportunities. Perfection is the enemy of progress, especially on Wall Street. The worst thing you can do is stay out of the market forever, waiting for an ideal buy-in price that might never come. If you're just getting started, don't worry about placing your first trade on the perfect day. Almost nobody does that, and it's honestly just the luck of the draw. Just set your budget, pick a three-part timing schedule that works for you, and invest the reserved cash in Vanguard S&P 500 ETF shares on those dates. Before you buy stock in Vanguard S&P 500 ETF, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Vanguard S&P 500 ETF wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $656,825!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $865,550!* Now, it's worth noting Stock Advisor's total average return is 994% — a market-crushing outperformance compared to 172% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of June 2, 2025 Anders Bylund has positions in Vanguard S&P 500 ETF. The Motley Fool has positions in and recommends Vanguard S&P 500 ETF. The Motley Fool has a disclosure policy. Is the Vanguard S&P 500 ETF Index Fund a Buy Now? was originally published by The Motley Fool Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Time of India
4 days ago
- Business
- Time of India
Warren Buffett shifts gears: Dumps two major stocks, pours billions into Consumer Staples, here's why
In a strategic shift reflecting caution towards current market conditions, Warren Buffett's Berkshire Hathaway has divested from two prominent U.S.-based investments, signaling a reevaluation of its investment approach. Exit from S&P 500 ETFs Berkshire Hathaway has fully exited its positions in the Vanguard S&P 500 ETF (VOO) and the SPDR S&P 500 ETF Trust (SPY), selling shares worth approximately $22 million each. These ETFs, which track the S&P 500 index, have been long-standing recommendations by Buffett for individual investors due to their broad market exposure and low costs. Despite this move, Buffett's endorsement of index funds for individual investors remains unchanged. The decision to sell these holdings, which constituted a minor portion of Berkshire's extensive portfolio, is viewed by analysts as a routine portfolio adjustment rather than a shift in investment philosophy. Reduction in Financial Sector Holdings In addition to the ETF sales, Berkshire Hathaway has significantly reduced its stakes in several major financial institutions. The conglomerate cut its holdings in Bank of America by 14.7%, Citigroup by 73.5%, and Capital One Financial by 18.1%. Furthermore, it completely exited its position in Ulta Beauty. These adjustments suggest a strategic realignment of Berkshire's investment portfolio, possibly reflecting concerns about the financial sector's performance amid economic uncertainties. Live Events Increased Investment in Consumer Staples Contrasting its divestments, Berkshire Hathaway has initiated a substantial investment in Constellation Brands, acquiring 5.6 million Class A shares valued at approximately $1.2 billion. Constellation Brands is known for its portfolio of alcoholic beverages, including popular beer brands like Modelo and Corona. This move indicates a strategic pivot towards consumer staples, sectors traditionally considered more resilient during economic downturns. Market Implications Berkshire Hathaway's recent portfolio adjustments, including the liquidation of S&P 500 ETFs and a reduction in financial sector holdings, have raised questions among investors about potential market volatility. However, analysts suggest that these moves are consistent with Buffett's long-term investment strategy and do not necessarily indicate an anticipation of a market downturn. The company's increased investment in consumer staples further underscores a cautious yet strategic approach to navigating current market conditions. While the divestment from certain assets may prompt investor scrutiny, the underlying strategy appears aligned with Berkshire Hathaway's long-term investment philosophy. FAQs Did Warren Buffett change his stance on index funds? No. While Berkshire Hathaway sold its ETF holdings, Buffett still endorses index funds for individual investors. Why did Berkshire exit the S&P 500 ETFs? The sales were minor relative to its portfolio and are viewed as routine rebalancing rather than a philosophical shift.
