The Motley Foolยท2025-11-03 00:30Core Insights - Investing in an S&P 500 ETF provides exposure to the "Magnificent Seven" companies, which include Nvidia, Apple, Microsoft, Amazon, Alphabet, Meta, and Tesla, collectively valued at approximately $21.5 trillion [1][2] Group 1: Magnificent Seven Overview - The "Magnificent Seven" stocks are highly sought after due to their past success and growth potential, with the Vanguard S&P 500 ETF (VOO) being heavily weighted towards these companies [2][3] - The Magnificent Seven account for about 34% of VOO, with eight of the top ten holdings being these companies, indicating a significant concentration that may affect diversification [4] Group 2: Sector Composition - The tech sector dominates VOO, complemented by financials (13.5%), consumer discretionary (10.5%), communication services (10.1%), and healthcare (8.9%) [5] Group 3: Performance Metrics - Over the past decade, VOO has performed well, with Nvidia being the best performer, up over 1,380%, while Apple, despite being the worst performer among the group, is still up around 77% in the last three years [6][9] - VOO has averaged 12.8% annual returns since its inception in September 2010, or 14.8% when including dividends, showcasing strong performance for a diversified ETF [10] Group 4: Investment Growth Potential - Monthly investments of $500 into VOO could potentially grow to over $800,000 over time, depending on annual returns, highlighting the power of compound earnings [12] - An $800,000 portfolio in VOO could yield approximately $8,000 annually at a modest 1% dividend yield, providing a significant income stream [13]