VOO DCA Backtest
If you'd invested $700 every month, how long to $1M?
VOO (Vanguard S&P 500 ETF) tracks the S&P 500 — 500 large U.S. companies — at 1x, with no leverage. Vanguard launched it in 2010, and while it holds the very same index as the older SPY, it differs in manager and fee. It's one of the most-mentioned tickers among long-term investors who want to accumulate the entire U.S. market month after month.
Even over the full period, that's about $486.74K today · invested $133.7K · annualized +15%
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The S&P 500 that VOO holds
The S&P 500 bundles roughly 500 large companies listed on U.S. exchanges. It doesn't hold all 500 equally — the bigger a company (by market cap), the larger its weight — and companies that fall below the bar are dropped while newly grown ones are added on a regular schedule. Buy a single share of VOO and you're spreading a little money across this self-refreshing basket of leading U.S. companies.
VOO tracks this index at '1x,' straight through. A 1% daily rise in the index is about a 1% rise, a 1% drop about a 1% drop. It has none of the 'volatility drag' that plagues leveraged products (QLD, TQQQ) — the erosion of value even in sideways markets caused by daily resetting — so its structure fits steady monthly accumulation well.
How it differs from SPY — same index, different product
Because VOO and SPY hold the identical S&P 500, their returns are practically the same. The real differences are the manager (VOO is Vanguard, SPY is State Street) and the expense ratio. VOO's fee is about 0.03% per year, lower than SPY's (around 0.09%). Since the fee is skimmed from assets a little each year, the lower one is marginally better the longer and larger you invest.
In exchange, SPY has a long history since its 1993 listing, with very high trading volume and liquidity and a well-developed options market. So a common view is to favor SPY for short-term trading and the lower-fee VOO for long-term accumulation. Either way, just remember the contents inside (the S&P 500) are the same.
Dividends, reinvestment, and total return
The companies in the S&P 500 pay dividends, and VOO passes those along to shareholders (paid quarterly). Over the long run, what matters isn't the price chart alone but total return — price appreciation plus dividends. Reinvesting those dividends to buy more shares lets them compound, which can make a meaningful difference across many years.
The numbers in the result box above are computed on a dividend-reinvested, adjusted-close basis, so they reflect total return rather than price alone. When you're comparing long-horizon accumulation, keep in mind that a fund's headline price gain and its total return are two different things — and it's the total return that lands in your account.
As a long-term target, and your start date
With no leverage and broad diversification across 500 large U.S. companies, VOO is often cited as an easier long-term accumulation target to live with than individual stocks or leveraged products. Investing the same amount every month buys less when prices are high and more when they're low, smoothing your average cost — an approach it pairs well with.
That said, 'less choppy' doesn't mean 'won't fall.' In a bear market where the whole market sinks, VOO drops hard too, and whether you started right before a peak or right after a crash changes the outcome for the same fund. The fact that it trended upward in the past doesn't guarantee the future, so it's safer to run it through the calculator yourself under various conditions — amount, horizon, and goal — before deciding.
Want to change the amount, buy day, or goal? Use the button above to calculate it yourself.
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This content is for informational purposes and is not investment advice or a recommendation. You are solely responsible for your investment decisions.