If You'd Invested $1,000 in the Vanguard S&P 500 ETF 5 Years Ago, Here's How Much You'd Have Today

Investors don’t always need to pick individual stocks to be successful. There are numerous exchange-traded funds (ETFs) that can provide different kinds of exposure to the stock market.

The Vanguard S&P 500 ETF (VOO +0.36%) is one of the most popular choices out there. As its name suggests, this ETF tracks the performance of the S&P 500 index, a closely watched benchmark.

If you’d invested $1,000 in the Vanguard S&P 500 ETF five years ago, how much money would you have today?

Investors hit a double

The Vanguard S&P 500 ETF put up a trailing five-year return of 99.5% (as of Nov. 17). A $1,000 investment then would be worth about $2,000 today. It’s hard to argue when you see your starting capital double in 60 months.

Notable factors driving the market’s returns

It’s a good idea for investors to try to figure out the key variables propelling the market higher. Doing this will help you figure out whether these trends are sustainable and still have potential to drive returns going forward.

The S&P 500 has benefited tremendously from ongoing economic growth, despite headwinds like the pandemic, higher interest rates, and geopolitical uncertainty. Passive investments have also introduced more capital to the stock market, which boosts demand for equities. And, of course, the monster success of massive technology companies can’t be ignored.

In my view, these trends will continue to support stocks in the years ahead.