A Look Inside SPY And VOO: What’s Changed Since December 31, 2021

A Look Inside SPY And VOO: What's Changed Since December 31, 2021

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VOO and other S&P 500 index funds report data that can lag for as much as two months behind. How misleading is that information when markets are correcting fast?

We compare metrics of VOO as of January 31, 2022 and those of SPY now to see how they differ.

We look at how the weights of the individual stocks in these S&P 500 index ETFs have changed YTD and what it tells us about these ETFs.

BBuilder/iStock via Getty Images When I have been researching recent articles about the Vanguard S&P 500 ETF ( VOO ) I noticed that Vanguard only provides investors with information about its holdings that is more than a month out of date -sometimes as much as two months late. Since VOO is a share class of a mutual fund The Vanguard 500 Index Fund ( VFIAX ), Vanguard is not required to report its holdings daily as most other ETFs must do. A quick look at the Fidelity 500 Index Fund ( FXAIX ) showed that its current data was also dated as being as of January 31, 2022.

A lot has happened in the past few months–which just might be the understatement of the year! So I began to wonder just how misleading the data we are given about Vanguard and other fund providers very popular S&P 500 index funds might be. How much the holdings of the ETFs that track the S&P 500 have changed since 2022 began?

VOO tracks the S&P 500 index very closely, so it is reasonable to assume that its holdings will be extremely similar to those of another ETF that tracks the same index – the SPDR S&P 500 Trust ( SPY ). SPY does report its full holdings daily along with information about what percent of the index’s total value each stock contributes. When I was researching this article on March 12, 2022 I was able to download information about SPY’s complete holdings as of March 10, 2022 from State Street Global Advisors website.

I then went to the Vanguard Advisors site where I downloaded VOO’s holdings as of December 31, 2021 and the valuation metrics it gives us for VOO as of January 31, 22. Though Vanguard gives us its holdings as of earlier month ends, it does not give us valuation metrics for any but the latest period it reports on. The S&P 500’s Correction Has Changed its Metrics Since Jan 31, 2022

P/E Ratio

Vanguard tells us that VOO’s P/E ratio at the end of January was 22.8. State Street Global Advisors (SSGA), SPY’s fund provider, tells us that the S&P 500’s current P/E ratio is now 20.71. This is a significant drop–one that puts its P/E ratio back at a level that is more characteristic of where it has been during periods when the market was healthy and corporate earnings were growing strongly. (For more details on the S&P 500’s P/E ratios under different circumstances see this recent article .)

More importantly, SSGA tells us that the S&P 500 index’s predicted P/E for the year is only 19.02. This is a very big change from Vanguard’s 22.8. Future Earnings Growth Rate

SSGA also tells us that the estimated future earnings growth rate of the S&P 500 index as a whole is 14.12%. This is a lot lower than the earnings growth rate Vanguard reports for VOO, which is 18.36%. As usual, Vanguard doesn’t give us any details as to how that earnings growth rate was arrived at. Information about the Size of Individual Holdings

SSGA tells us that right now the Weighted Average Market Cap of the companies in SPY is $580,519.30 Million and that the Median Market Cap of SPY’s holdings is only $30,369.97 Million. The Mean Market Cap size they report is $79,208.39 Million.

Vanguard tells us that on January 31, 2022, VOO’s Median Market Cap was $203.2 Billion. SSGA’s $30,369.97 Million Median figure is so much different from Vanguard’s that one of two things have happened. A lot of stocks in the S&P 500 index have shrunk their market caps due to price collapses or one of these numbers is being reported incorrectly.

Be that as it may, as you will see when we get into the details, SPY’s weighted average is far more illustrative of what is really going on in the S&P 500.

The median is a very misleading number to use for an index where a very small number of extremely large companies determine most of the entire index’s performance. […]

source A Look Inside SPY And VOO: What’s Changed Since December 31, 2021

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