If you’re thinking about investing in financial securities, you should know about SWPPX and VOO. If you want to diversify your portfolio, keep reading to find out which option might be better for you.
Investment portfolios vary because different investors have different objectives. Some prefer passive investing, while others actively manage their investments to boost capital gains. So, which investment should you consider for your portfolio?
SWPPX and VOO are both financial securities from investment companies, but they differ in key ways. SWPPX is a mutual fund, while VOO is an Exchange-Traded Fund (ETF). Mutual funds combine various investments into one holding and pay dividends to fund holders. ETFs, like VOO, are tradable assets you can buy and sell just like stocks.
SWPPX and VOO both invest in US stocks and hold shares from similar publicly listed companies. SWPPX, or the Schwab® S&P 500 Index Fund, has a net expense ratio of 0.20% and aims to track the S&P 500 by investing at least 80% of its funds in stocks listed on the US Stock Exchange. This mutual fund allows you to invest in about 500 top-performing US stocks without a minimum investment requirement.
VOO, or the Vanguard S&P 500 Index Fund, is an ETF that also mirrors the S&P 500 index by holding stocks from the largest US companies. It’s popular due to its low management fees and the ability to trade it during stock market hours. VOO’s large-cap stocks are relatively stable and less prone to value drops, offering more growth opportunities.
Both SWPPX and VOO offer diversified assets, which helps spread out risk. The biggest difference between them is that SWPPX is a mutual fund available only through Charles Schwab, while VOO is a widely traded ETF. Over five years, VOO has a higher return (19.72%) compared to SWPPX (15.21%). SWPPX’s expense ratio is 0.02%, while VOO’s is 0.03%.
Despite their differences, both funds aim to mirror the S&P 500 index and keep costs low. Investors are attracted to their low transaction costs, which minimally impact dividends.
Here are some frequently asked questions about SWPPX and VOO:
1. **What’s the difference between VOO and SWPPX?**
– VOO is an ETF that can be traded on various platforms, while SWPPX is a mutual fund available only through Charles Schwab. Both hold similar stocks.
2. **Is SWPPX a good investment?**
– Yes, SWPPX has performed well over the last few years, with annualized returns of 17.60% over the past five years. It’s ranked third in its category for performance and returns.
3. **Does SWPPX pay dividends?**
– Yes, SWPPX pays dividends. As of November 2021, it was paying an average of 1.45%.
Which fund is right for you depends on your personal preferences. SWPPX is a mutual fund, while VOO is an ETF. Both are passively managed and include similar stocks. Investing in these funds can help you achieve your financial goals by diversifying your portfolio. Understanding these funds is a great step in formulating your investment strategies. Make sure to know the best allocation for your money to make informed decisions.