VFIAX Is The Worlds Largest 500 Index Fund

The Vanguard 500 Index Fund (VFIAX) is one of the most popular investment products available today. VFIAX currently has a net asset value of over $700 billion making it the largest 500 index fund in the world.

VFIAX
Fund Inception 2000
Dividend (TTM) $5.39
Expense Ratio 0.04%
# of Stocks 507
Top 10 Holdings 28%
Foreign Holdings 0.0%

VFIAX is Vanguard’s 500 Index Fund. VFIAX was created in 2000 and is designed to provide investors exposure to the largest 500 companies on the United States stock market by closely tracking the S&P 500 index.

Investing in VFIAX is akin to investing in the total American economy. The low-fee nature and broad exposure of VFIAX have allowed it to become the most popular 500 index fund in the world.

Continue reading to learn more about what makes VFIAX the largest 500 index fund in the world.

A LINE CHART OF Vfiax STOCK PRICE SINCE INCEPTION.

A LINE CHART OF Vfiax STOCK PRICE SINCE INCEPTION.

Why VFIAX is the most popular 500 index fund

7 reasons VFIAX is a popular investment:

  1. Low fees

  2. Diversification

  3. Set it and forget it

  4. Easy to understand

  5. A reputation of quality

  6. Not actively managed

  7. History of increasing in value over the long-term

VFIAX historical returns

Here are the returns that VFIAX has posted over the 1-, 3-, 5-, 10-year, and since inception:

1-Year: 45.96%

3-Year: 18.63%

5-Year: 17.38%

10-Year: 14.14%

Since Inception (2000): 7.75%

VFIAX has returned nearly 8% per year on average over the long run. This type of dependable figure is used to calculate your financial independence number or the number at which you will be able to pay yourself in retirement instead of relying on earned income from an employer.

Major stock market events that occurred since 2000:

  • 2001: 8-month recession (dot-com bust) and the 9/11 terrorist attacks.

  • 2003: Start of Iraq war

  • 2008/2009: The Great Recession

  • 2020: COVID-19 and Recession

VFIAX Holdings

At the time of the last update per Vanguard on 4/30/2021, here are the top 10 holdings within VFIAX:

  1. Apple Inc.

  2. Microsoft Corp.

  3. Amazon.com Inc.

  4. Alphabet Inc.

  5. Facebook Inc.

  6. Tesla Inc.

  7. Berkshire Hathaway Inc.

  8. JPMorgan Chase & Co.

  9. Johnson & Johnson

  10. Visa Inc.

Compound Interests Effect on VFIAX

Let’s say you’re able to max out an IRA each year at $6,000. Starting with zero dollars invested, after 20-years of a 7.75% interest rate, you’ll have about $287,000 in your retirement account.

an image of VFIAX 20-year compound interest

an image of VFIAX 20-year compound interest

Let’s say you had amazing parents who taught you the importance of saving and investing. You get started at a young age and max out a Roth IRA for 40-years. You’d have about $1.6 million in your retirement account.

an image of VFIAX compounded interest after 40-years.

an image of VFIAX compounded interest after 40-years.

Interest in VFIAX is growing rapidly

It’s no wonder why the price of VFIAX continues to increase over time. The net asset value is over $700 billion and it’s the most recommended long-term investment among the personal finance community.

The image below is the Google Trends result for “VFIAX.” As you can see, interest in VFIAX has been growing significantly over the past decade.

AN IMAGE OF Vfiax INTEREST OVER TIME FROM GOOGLE TRENDS.

AN IMAGE OF Vfiax INTEREST OVER TIME FROM GOOGLE TRENDS.

Summary

If you want a single index fund portfolio you can’t beat the benefits of the Vanguard 500 Market Index Fund (VFIAX):

  • Passiveness

  • Diversification

  • Low investment minimum

  • History of 7 percent market returns

You don’t have to keep a single fund portfolio. in fact, many investors like to keep a core position in an index fund like VFIAX to anchor their investment portfolio. You can start with a low-fee index fund like VFIAX and add additional funds, stocks, or bonds at a later date. You’re in control of your investment decisions.

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