Vanguard’s $VOO Grabs $60B—Is It Time to Ditch Individual Stocks?

Stocks haven’t had a good 2025 so far and considering the ongoing uncertainty about the tariffs and recession concerns, I believe market ups and downs will continue for the near term. Looking at the high market volatility, several investors have moved towards exchange-traded funds. April saw a massive inflow in ETFs and Vanguard trounced the competition. 

Vanguard S&P 500 ETF (NYSE: VOO) inflated in size and pushed past several other similar ETFs tracking the S&P 500. The ETF is dominating 2025 inflows and continues to charge higher. VOO has historically benefitted from the steady inflows and has generated reliable returns for investors. According to an update from Eric Balchunas, a senior ETF analyst at Bloomberg, the U.S. ETF market has reached $400 billion year-to-date as of mid-May 2025.

Out of this, Vanguard VOO is leading the charge and has already attracted over $60 billion this year, reflecting its strength in the highly competitive industry. Even Warren Buffett invested in VOO, and the fund is expected to amass assets totaling $164 billion by the end of the year. So, is it time to put your money in VOO and ditch individual stocks? Let’s dive deep and decide.

An unstoppable ETF 

When it comes to low-cost ETFs, Vanguard has set a gold standard. The Vanguard S&P 500 ETF (VOO) has become the core portfolio of several investors. The fund tracks the S&P 500 and is a cost-effective way to bet on some of the biggest stocks in the U.S. VOO provides instant diversification across sectors and industries. However, it is focused on the tech sector with 30.40% allocation of funds. This is followed by the financial sector with 14.40% of funds and the consumer discretionary sector with 10.40%. VOO invests in the Magnificent Seven and if you do not want to take company-specific risks, this is an ideal ETF to invest in the tech sector. 

The fund has 505 stocks and its biggest stock holdings include:

• Apple Inc.
• Microsoft Corp.
• NVIDIA Corp.
• Amazon.com Inc.

The maximum allocation in a stock is 6.75% and apart from these four stocks, the remaining 501 stocks have a weightage lower than 3%. Besides the top tech stocks, the fund also invests in Broadcom, JPMorgan Chase, and Berkshire Hathaway. 

Vanguard VOO has an expense ratio of 0.03% and its NAV is $532. It has remained flat in 2025 but is up 9.32% in 12 months. The fund has an annual average return of 10% which is very impressive. Its 30-day sector yield is 1.32% and it pays quarterly dividends. The S&P 500 consists of some of the biggest dividend companies so holding VOO for the long term will ensure steady, passive income. Except for 2020, VOO has reported steady dividend growth. 

The current market volatility has led investors towards broad-based ETFs instead of individual stocks. This not only reduces company-specific risks but also ensures steady income. 

Ultimate diversification 

There is no guarantee that VOO will not see any dips. It is affected whenever the market sees ups and downs. Since it invests in S&P 500 stocks, the fund will always be impacted by economic downturns but it has remained steady in the past and I believe it will continue to do so. However, investors will be able to enjoy the same returns as the S&P 500 daily. Instead of trying to beat the benchmark index, it is possible to buy the benchmark with VOO. 

Vanguard offers ultimate diversification by investing in multiple sectors and holding over 500 stocks. It allows investors to hold the biggest U.S. stocks without actively managing them. A dip in one sector will still keep your money safe since the fund will be rebalanced. Investors get to own elite stocks without researching them and worrying about the market’s ups and downs. 

I believe Vanguard VOO is a no-brainer buy and worth an addition to every portfolio.