Vanguard S&P 500 ETF (VOO) Near Record Highs: December 6, 2025 Update, Flows and 2026 Market Forecasts

Vanguard’s flagship index tracker, the Vanguard S&P 500 ETF (VOO), heads into the first weekend of December 2025 sitting just below all‑time highs, backed by record inflows, strong risk‑adjusted returns and a wide — but very divided — set of forecasts for the S&P 500 in 2026. ^[1]

Below is a detailed look at where VOO stands today, what’s been driving recent moves, and how Wall Street’s latest 2026 projections could shape the ETF’s outlook.

VOO at a glance on 6 December 2025

Price & range: VOO closed on Friday, 5 December 2025 at about $630.48, up roughly 0.2% on the day and less than 1% below its 52‑week high near $634. It’s now more than 40% above its 52‑week low just over $440. ^[2]
Size: The fund manages about $824 billion in assets, making it one of the largest ETFs in the world. ^[3]
Costs: VOO charges a rock‑bottom 0.03% expense ratio, undercutting most active funds and even many rival index ETFs. ^[4]
Income: Over the last 12 months, VOO distributed around $7.0 per share in dividends, for a trailing yield of ~1.1%. ^[5]
Performance: Including dividends, VOO has delivered about 14.3% total return over the past year, with long‑term annualised returns around 14–15% since inception in 2010. ^[6]
Risk‑adjusted returns: As of 6 December 2025, the ETF shows Sharpe ratios of roughly 0.78 (1‑year), 0.88 (5‑year) and 0.81 (10‑year), indicating strong returns relative to volatility over multiple horizons. ^[7]

From a pure numbers standpoint, VOO is entering year‑end 2025 near peak valuations, near record prices, and with a risk‑return profile that still looks attractive compared with many alternatives.

What exactly is VOO — and what’s inside it now?

VOO is a market‑cap‑weighted ETF that tracks the S&P 500 Index, giving investors exposure to roughly 500 of the largest U.S. companies. It is passively managed and designed to mirror the index as closely and as cheaply as possible. ^[8]

Key structural features:

Broad but concentrated: VOO holds just over 500 stocks, but about 40% of its assets sit in the top 10 positions, reflecting the dominance of mega‑cap names in today’s market. ^[9]
Top holdings (approximate weights):
- Nvidia
- Apple
- Microsoft
- Amazon
- Broadcom
- Alphabet (Class A and Class C)
- Meta Platforms
- Tesla
- Berkshire Hathaway (Class B)
  Together these giants account for slightly over 40% of the fund’s value. ^[10]

Sector‑wise, that means VOO is heavily tilted toward technology and communication services, with significant stakes in financials, consumer discretionary, and health care. A recent article highlighting Warren Buffett’s preference for low‑cost S&P 500 index funds notes that many of the index’s largest members are “large, durable cash‑flow generators” — exactly the kind of businesses that dominate VOO’s portfolio today. ^[11]

For investors, that combination of broad diversification plus mega‑cap concentration is both a strength and a risk: you’re owning the entire U.S. large‑cap market, but your returns are disproportionately driven by a small cluster of AI‑ and cloud‑focused leaders.

Recent market action: VOO rides the S&P 500’s win streak

S&P 500 near record highs

The backdrop for VOO is straightforward: the S&P 500 itself is on a tear. As of 5 December 2025, the index had just logged a four‑day winning streak and was trading within inches of a new record high after its best week since May. ^[12]

The rally has been narrowly led by the largest stocks:

S&P 500 (market‑cap weighted) is up about 17.1% year‑to‑date.
S&P 500 Equal Weight Index is up only 9.6% in the same period, underlining how much mega‑caps have driven returns. ^[13]

Because VOO is market‑cap‑weighted, it benefits directly from that mega‑cap leadership.

Day‑to‑day drivers: data, the Fed and AI heavyweights

Short‑term moves in VOO this week have been tied closely to economic headlines and a few very large components:

2 December: VOO slipped about 0.46% as weak U.S. manufacturing data, higher bond yields and a sell‑off in cryptocurrencies weighed on risk assets. ^[14]
4 December daily update: The ETF gained roughly 0.35% on Wednesday, helped by strong performance from Tesla, UnitedHealth and Alphabet — all prominent S&P 500 names. ^[15]
5 December: VOO extended its winning streak, edging higher for a third straight session as traders waited for the latest PCE inflation report, the Federal Reserve’s preferred price gauge, which will heavily influence expectations for 2026 rate cuts. ^[16]

Taken together, the picture is of an ETF grinding higher on moderate, data‑dependent gains, with every inflation print, Fed comment and mega‑cap earnings headline showing up almost instantly in VOO’s price.

Record inflows: investors keep “feeling brand VOO”

If price shows what investors think, fund flows show what they are actually doing — and on that front VOO is in rare territory.

New inflow records in 2025

According to ETF database figures and VettaFi commentary:

VOO has taken in just over $120.5 billion of net inflows through 21 November 2025, already surpassing its previous full‑year record of $116 billion — despite a roughly 30% spike in the VIX over the prior month. ^[17]
Over the past 12 months, ETFdb data shows about $135.6 billion in net flows into VOO, with $19.5 billion in the last month and more than $41 billion over the past three months. ^[18]
Assets under management have climbed by more than $230 billion over the last year, reflecting a mix of market gains and new money. ^[19]

Those numbers confirm that VOO has become the go‑to vehicle for S&P 500 exposure, both for individual investors and large allocators shifting toward low‑cost core index funds.

Why the flows matter

These inflows suggest:

Persistent confidence in U.S. large caps. Even after a multi‑year AI‑driven boom, investors are still willing to pile into the U.S. benchmark.
Preference for simplicity and low fees. In a world of complex thematic and leveraged products, VOO’s 0.03% fee and straightforward mandate remain very attractive. ^[20]
Potential liquidity advantage. Massive assets and steady trading volumes help keep bid–ask spreads tight, which is especially important for advisors and institutions. ^[21]

However, strong flows can also be a sentiment gauge: record inflows late in a long bull market often coincide with elevated valuations — something worth keeping in mind.

What the experts are saying about VOO and the S&P 500

Buffett’s ongoing endorsement of low‑cost S&P 500 funds

A widely read article this week revisited Warren Buffett’s long‑standing preference for simple S&P 500 index funds and notes that he has specifically said he likes the Vanguard S&P 500 ETF (VOO) for his own estate plan. ^[22]

Key points from Buffett’s approach, as summarised there:

Most investors — and even many professionals — struggle to beat the S&P 500 over long periods.
Buffett has repeatedly recommended that non‑experts “just buy the index”, often using dollar‑cost averaging over time rather than trying to time the market. ^[23]
In his 2013 Berkshire letter, he outlined instructions for his heirs that effectively allocate the bulk of their portfolio to a very low‑cost S&P 500 index fund from Vanguard, an implicit nod to products like VOO. ^[24]

That endorsement doesn’t guarantee future returns, but it does reinforce VOO’s status as a core, long‑term vehicle rather than a tactical trading product.

Morningstar: “One of the best in its class”

Morningstar’s most recent commentary on VOO describes it as one of the best large‑blend ETFs, highlighting a 10‑year annualised outperformance of roughly 2.2 percentage points versus the category average through August 2025. They attribute that edge largely to ultra‑low fees and highly efficient index tracking rather than any active bets. ^[25]

In other words, VOO’s job is to be the market, and it has treated investors well simply by replicating the S&P 500 more cheaply than many competitors.

VOO vs growth‑heavy alternatives and income ETFs

Recent analysis comparing VOO with other popular ETFs highlights where it fits:

VOO vs Vanguard Growth ETF (VUG): VUG has produced higher recent returns thanks to even heavier exposure to tech and growth names, while VOO spreads risk more broadly across all 11 sectors and offers a slightly higher dividend yield. ^[26]
VOO vs JEPI (JPMorgan Equity Premium Income ETF): A new note points out that JEPI currently yields around 7.5% versus VOO’s ~1.1%, but JEPI uses an options‑based income strategy that can cap upside, while VOO is focused on total return from pure equity exposure. ^[27]

The common thread: VOO is positioned as a low‑cost, growth‑plus‑income core holding, not a yield‑maximising or niche factor play.

Valuation check: VOO isn’t cheap anymore

With the S&P 500 near record highs, VOO’s valuation has climbed too:

Price‑to‑earnings: ETFdb puts VOO’s P/E ratio around 27–28x, notably higher than the large‑cap growth category average of ~20x and far above the broader U.S. large‑cap segment average near 12x. ^[28]
Dividend yield: At ~1.1%, VOO’s yield is slightly below its category average and well below the 3% yields available in some equity income strategies. ^[29]

RBC Wealth Management’s 2026 U.S. outlook flags similar concerns at the index level: they estimate the S&P 500 is trading at a forward P/E of about 21.3x, compared with a 10‑year average near 18.6x, and call the consensus 2026 earnings forecast of roughly $310 per share (up 12.8% year‑over‑year) “somewhat lofty.” ^[30]

For VOO holders, this means:

The fund is tied to a market that’s priced well above its long‑run average,
Future returns are likely to depend heavily on whether earnings growth actually lives up to these ambitious expectations.

2026 forecasts: what could be ahead for VOO?

Because VOO is a pure S&P 500 tracker, every index forecast doubles as a VOO forecast (before fees and tracking differences). Current outlooks span the full spectrum:

Bullish scenarios: 7,500–8,000 on the S&P 500

Several major houses see more upside:

Reports summarised by financial media indicate JPMorgan expects the S&P 500 to reach around 7,500 by the end of 2026, with a potential path to 8,000 if the Federal Reserve continues to cut rates and growth holds up. ^[31]
A recent segment highlighted Morgan Stanley’s chief U.S. equity strategist maintaining a 7,800 target, arguing that strong earnings growth and a “rolling recovery” could support another year of gains. ^[32]
An S&P 500 “2026 outlook” summary notes that many institutional forecasts now assume double‑digit earnings growth, with AI and cloud spending remaining the primary engine of profits. ^[33]

If those bullish scenarios play out, VOO could continue to deliver solid mid‑teens annual returns, though likely at the cost of further concentration in a handful of tech and communication giants.

Balanced but cautious: RBC’s “yellow warning signs”

RBC’s 2026 outlook falls into a middle ground:

They expect U.S. GDP growth around 2.2% in 2026, slightly above consensus.
They see S&P 500 earnings up about 12–13% in both 2025 and 2026 but caution that growth will remain heavily dependent on AI‑related capital spending and cloud computing. ^[34]
RBC is “uncomfortable” with elevated valuations but views current conditions as “yellow warning signs rather than a full‑fledged bubble”, keeping a Market Weight stance on U.S. equities. ^[35]

This implies that while VOO may still outperform bonds and cash, investors should be ready for higher volatility and more modest returns than the last decade.

Bearish tail risks: bubble talk and a possible 40% drawdown

Not everyone is optimistic:

A recent 2026 outlook from a Seeking Alpha contributor outlines a “recessionary bear market” scenario in which the S&P 500 could fall about 40% to around 4,100 as valuations compress and the current AI‑driven enthusiasm unwinds. ^[36]

That type of move would almost certainly translate into a similar drawdown for VOO, reminding investors that even broad, diversified index funds can experience deep, multi‑year bear markets — as seen in 2000–2002 and 2008–2009.

Risk and reward profile: what today’s numbers say about VOO

Putting the pieces together:

Strong historical risk‑adjusted returns
- Sharpe ratios near or above 0.8 over long periods reflect consistent excess return per unit of risk, a hallmark of broad equity exposure during a long bull market. ^[37]
Concentration risk at the top
- With over 40% of assets in the top 10 holdings, dominated by AI and cloud leaders like Nvidia, Apple, Microsoft and Alphabet, VOO’s short‑term performance is more sensitive than ever to the fortunes of a small group of companies. ^[38]
Elevated valuations
- A P/E near 28x and a below‑average yield leave less margin for error if earnings disappoint or bond yields move meaningfully higher. ^[39]
Structural advantages still intact
- Ultra‑low fees, deep liquidity, tight spreads and clean index tracking continue to give VOO a structural edge over many active funds and higher‑cost ETFs, especially over 10‑year+ horizons. ^[40]

For many investors, that combination still makes VOO a compelling long‑term core holding, but one that now carries higher valuation risk than in earlier stages of the cycle.

Key takeaways for investors watching VOO right now

Near records: VOO sits close to all‑time highs, up strongly from its 52‑week low and in step with a market‑cap‑weighted S&P 500 that has returned about 17% year‑to‑date. ^[41]
Flows are booming: Record 2025 inflows north of $120 billion show that investors still favour broad U.S. exposure through low‑cost index ETFs. ^[42]
Valuation is the main debate: While Wall Street targets between 7,500 and 8,000 on the S&P 500 highlight optimistic scenarios, others warn of bubble dynamics and potential 40% drawdowns — and both views matter for VOO. ^[43]
Buffett and Morningstar still like the strategy: High‑profile endorsements and independent research continue to frame a low‑cost S&P 500 ETF as a sensible default allocation for long‑term investors, provided they can tolerate equity volatility. ^[44]

Final word: information, not personal advice

This article is for informational and educational purposes only and does not constitute personalised investment advice. The right allocation to VOO — or to any equity fund — depends on your time horizon, risk tolerance, income needs and overall financial plan.

If you’re considering starting or adjusting a position in the Vanguard S&P 500 ETF, it may be worth:

Stress‑testing your portfolio for large equity drawdowns,
Thinking carefully about your time horizon (10+ years vs. a few years), and
Discussing your plans with a licensed financial adviser who understands your individual situation.