Investing in the Vanguard S&P 500 ETF (VOO)? Beware of This 1 Sneaky Risk.
The top 10 components recently made up a whopping 38% of the fund's value -- and the top three made up about 20%.
Overview
If you're investing in the Vanguard S&P 500 ETF (NYSEMKT: VOO) -- or the SPDR S&P 500 ETF (NYSEMKT: SPY) -- that's great. You're now a partial owner of 500 of America's biggest companies.
Even Warren Buffett has recommended low-cost S&P 500 index funds for most of us small investors. In his 2016 letter to shareholders, he noted, "Over the years, I've often been asked for investment advice ... My regular recommendation has been a low-cost S&P 500 index fund."
Details
But there's a bit of a problem with these index funds today: They're quite concentrated. Here's a closer look at this issue, along with a way to invest in the S&P 500 -- without the concentration.
Source
Originally published at www.fool.com.