Skip to content

VOO vs. GOVT: What’s The Difference?

The Vanguard S&P 500 ETF (VOO) and the iShares U.S. Treasury Bond ETF (GOVT) are both among the Top 100 ETFs. VOO is a Vanguard Large Blend fund and GOVT is a iShares Intermediate Government fund. So, what’s the difference between VOO and GOVT? And which fund is better?

The expense ratio of VOO is 0.02 percentage points lower than GOVT’s (0.03% vs. 0.05%). VOO also has a high exposure to the technology sector while GOVT is mostly comprised of AAA bonds. Overall, VOO has provided higher returns than GOVT over the past ten years.

In this article, we’ll compare VOO vs. GOVT. We’ll look at risk metrics and holdings, as well as at their industry exposure and portfolio growth. Moreover, I’ll also discuss VOO’s and GOVT’s annual returns, fund composition, and performance and examine how these affect their overall returns.

FYI: Another great way to get exposure to the real estate sector is by investing in real estate debt. Groundfloor offers fantastic short-term, high-yield bonds that can add diversification to your portfolio!


NameVanguard S&P 500 ETFiShares U.S. Treasury Bond ETF
CategoryLarge BlendIntermediate Government
Avg. Return14.45%2.67%
Div. Yield1.34%1.0%
Expense Ratio0.03%0.05%

The Vanguard S&P 500 ETF (VOO) is a Large Blend fund that is issued by Vanguard. It currently has 753.41B total assets under management and has yielded an average annual return of 14.45% over the past 10 years. The fund has a dividend yield of 1.34% with an expense ratio of 0.03%.

The iShares U.S. Treasury Bond ETF (GOVT) is a Intermediate Government fund that is issued by iShares. It currently has 17.07B total assets under management and has yielded an average annual return of 2.67% over the past 10 years. The fund has a dividend yield of 1.0% with an expense ratio of 0.05%.

VOO’s dividend yield is 0.34% higher than that of GOVT (1.34% vs. 1.0%). Also, VOO yielded on average 11.77% more per year over the past decade (14.45% vs. 2.67%). The expense ratio of VOO is 0.02 percentage points lower than GOVT’s (0.03% vs. 0.05%).

FYI: The best way I've found to invest is through M1 Finance. It's free and you even get an instant line of credit and 100$! Have a look here (link to M1 Finance).

Fund Composition


VOO - Holdings

VOO HoldingsWeight
Apple Inc5.92%
Microsoft Corp5.62% Inc4.06%
Facebook Inc Class A2.29%
Alphabet Inc Class A2.02%
Alphabet Inc Class C1.97%
Tesla Inc1.44%
Berkshire Hathaway Inc Class B1.44%
NVIDIA Corp1.37%
JPMorgan Chase & Co1.3%

VOO’s Top Holdings are Apple Inc, Microsoft Corp, Inc, Facebook Inc Class A, and Alphabet Inc Class A at 5.92%, 5.62%, 4.06%, 2.29%, and 2.02%.

Alphabet Inc Class C (1.97%), Tesla Inc (1.44%), and Berkshire Hathaway Inc Class B (1.44%) have a slightly smaller but still significant weight. NVIDIA Corp and JPMorgan Chase & Co are also represented in the VOO’s holdings at 1.37% and 1.3%.

GOVT - Holdings

GOVT Bond SectorsWeight
Below B0.0%
US Government0.0%

GOVT’s Top Bond Sectors are ratings of AAA, Others, Below B, B, and BB at 100.0%, 0.0%, 0.0%, 0.0%, and 0.0%. The fund is less weighted towards BBB (0.0%), A (0.0%), and AA (0.0%) rated bonds.

TIP: Keep track of all your investments with Personal Capital. I use this amazing tool to aggregate all investments in one place and make sure I'm on track to financial freedom. Oh, and did I mention it's free? Try it out here (link to Empower Personal Capital).


Annual Returns

VOO vs. GOVT - Annual Returns


VOO had its best year in 2013 with an annual return of 32.33%. VOO’s worst year over the past decade yielded -4.42% and occurred in 2018. In most years the Vanguard S&P 500 ETF provided moderate returns such as in 2016, 2014, and 2012 where annual returns amounted to 11.93%, 13.63%, and 15.98% respectively.

The year 2020 was the strongest year for GOVT, returning 7.92% on an annual basis. The poorest year for GOVT in the last ten years was 2013, with a yield of -2.84%. Most years the iShares U.S. Treasury Bond ETF has given investors modest returns, such as in 2018, 2015, and 2016, when gains were 0.74%, 0.76%, and 0.92% respectively.

Portfolio Growth

VOO vs. GOVT - Portfolio Growth

FundInitial BalanceFinal BalanceCAGR

A $10,000 investment in VOO would have resulted in a final balance of $30,890. This is a profit of $20,890 over 8 years and amounts to a compound annual growth rate (CAGR) of 14.45%.

With a $10,000 investment in GOVT, the end total would have been $12,297. This equates to a $2,297 profit over 8 years and a compound annual growth rate (CAGR) of 2.67%.

VOO’s CAGR is 11.77 percentage points higher than that of GOVT and as a result, would have yielded $18,593 more on a $10,000 investment. Thus, VOO outperformed GOVT by 11.77% annually.

Current recommendations:

Over the past years, I have discovered several tools and products that have helped me tremendously on my path to financial freedom:

P.S.: The links below are affiliate links, which means I receive a small commission at no extra cost to you when you sign up for one of the services. Thank you for your support!

1)Personal Capital is simply the best tool out there to track your net worth and plan for financial freedom. Just their retirement planner alone has become an invaluable tool to keep myself on track financially. Try it out, it's free!

2) Take a look at M1 Finance, my favorite broker. I love how easy it is to invest and maintain my portfolio with them. I can set up automatic transfers, rebalance my portfolio with one click and even borrow up to 35% of my assets at super low interest rates!

3) Fundrise is by far the best way I've found to invest in Real Estate. You can diversify your portfolio by investing in their eREITs or even allocate capital to individual properties (without the hassle of managing tenants!).

4) Groundfloor is another great way to get exposure to the real estate sector by investing in short-term, high-yield real estate debt. Current returns are >10% and you can get started with just $10.

5) If you are interested in startup investing, check out Mainvest. I've started allocating a small amount of assets to invest in and support small businesses. Return targets are between 10-25% and you can start with just $100!

To see all of my most up-to-date recommendations, check out the Recommended Tools section.


Leave a Reply

Your email address will not be published. Required fields are marked *