Posted: 10/29/2025 1:58:03 PM EDT
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I was about to move some funds into VOO (which is discussed heavily here), and I noticed VOOG, a growth-focused version of VOO. Other than a slightly higher expense ratio (0.03 vs 0.07 respectively), and a dividend that's higher in VOO, (1.1 vs 0.5% if I'm reading that correctly) why would you choose one over the other? I'm 47, it seems like VOOG could be a better choice until I am ready to slow down and switch to a more dividend-heavy portfolio. Am I reading that right, or are there other reasons you'd pick one over the other? |
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Originally Posted By jos51700: ….why would you choose one over the other? Invest in the one that best meets your needs. |
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I buy some of both every Friday. So far it seems to be working out. I also wouldnt understand a prospectus anyways. I know the expense ratio difference, and I think VOOG is a bit riskier, which is fine with me right now. |
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Look at the holdings and I’ll bet you find they, like the vast majority of funds, are nearly identical with a few small tweaks one way or the other. Anything that starts with VOO is going to be NVDA, MSFT, AAPL, AMZN, META, AVGO, GOOGL, TSLA, GOOG and after that it doesn’t really matter. IOW the higher expense ratios aren’t justified. It’s called marketing: giving people they think they want/need. Remember ESG funds? Do they even still exist? |
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Originally Posted By laxman09: I buy some of both every Friday. So far it seems to be working out. I also wouldnt understand a prospectus anyways. I know the expense ratio difference, and I think VOOG is a bit riskier, which is fine with me right now. @laxman09 Looking into it, I found VUG which is very similar to VOOG, with an expense ratio of 0.04%, not quite half of VOOG. Of course, I found it right after I bought VOOG, so now I have to switch it over lol |
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Originally Posted By grendelbane: Looking at a chart showing the performance of both, VOOG is the obvious winner, though past performance doesn’t guarantee future returns. If you are very risk averse you might prefer VOO. VOOG drawdowns could be steeper. For some people that’s a deal-breaker. That was my thought process, as well, but I'm newish to this so thank you for backing me up on that. |
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A few (single digit) years younger than you, with a .mil retirement (for risk tolerance comparison). As much as I love VOO, I would personally choose VOOG over it, if forced to decide exclusively. However, you might look at the expense ratios of SPYG, VUG, and MGK and compare historic performances (which do not guarantee future performance). I hold all 3 of those, and VOO, but no VOOG. SPYG uses the same strategy as VOOG; VUG and MGK use a different path to arrive at a similar place. I might start a thread later on the concept of “slowing down” by later switching to a dividend-heavy portfolio. The short version is: I’m skeptical, and there’s more than one path to the desired results. |
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Originally Posted By grendelbane: ...........VOOG is the obvious winner........ If you are very risk averse you might prefer VOO. If "risk" to you means the impact from broader economic conditions or corporate performance then they have the same risks (since the majority of both funds is comprised of the same stocks - the top 9 holdings of each fund are the same). As for being "the obvious winner" - there is only one winner. Pick a timeframe and only one stock or one fund has the highest increase in value. If that is your only metric then there are countless other options that have outgrown voog so why not invest in them? The difference between voo and voog is similar to the differenece between an sp500 fund and a nasdaq funds - they are mostly the same but one holds more of the big tech companies which have seen outsized growth over the last 10-15 years. |
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There really is no good definition for risk, most people are thinking of volatility, which is not the best definition, but it gets used because we don’t have much better. No way the risk is the same for both funds, they share many of the same holdings but not in the same percentages. If black swans fly, they will react differently. No way to tell which one does better, that’s the nature of black swans. As to buying something else with a better past history of gains, that’s is a viable strategy in the real world, but there were only 2 choices in this case. |
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Yeah, I hate using volatility as a proxy for risk. By definition, upward movement is also volatility. Historical drawdowns I think could be more useful, but it is harder to anticipate because it’s not forecast like implied volatility in options. In other words, one of the risks implied by volatility is making more money than expected. And that doesn’t get weighted the way most people think it does. |