I would say to hold the SPY you currently have and just start buying VOO instead of SPY whenever you invest in the future. The difference is not significant enough to sell whatever you have and change your cost basis.
And Buffett knows it, too, as SPDR S&P 500 ETF Trust is one of Berkshire Hathaway's own holdings. "Buffett was a believer in investing in S&P 500 funds for their simplicity and low costs," said Todd Rosenbluth, head of research at TMX VettaFi.
Alternatives to VOO and IVV
A prime competitor worth considering is the SPDR Portfolio S&P 500 ETF (SPLG). It tracks the same S&P 500 index as VOO and IVV but offers a slightly lower expense ratio at 0.02%. Another appealing feature of SPLG is its lower share price, around $64, compared to over $500 for IVV and VOO.
Warren Buffett's Berkshire Owns 2 ETFs: SPY and VOO
SPDR S&P 500 ETF Trust SPY. Vanguard S&P 500 ETF VOO.
The SPY ETF can be a convenient way to gain low-cost exposure to the S&P 500 index, a diversified basket of large cap U.S. stocks. While SPY has multiple advantages, investors should remain aware of certain risks, such as lack of exposure to other areas of the market, before buying shares.
VOO has a consensus rating of Moderate Buy which is based on 400 buy ratings, 99 hold ratings and 5 sell ratings. What is VOO's price target? The average price target for VOO is $621.22. This is based on 504 Wall Streets Analysts 12-month price targets, issued in the past 3 months.
Historically, the QQQ has outperformed the SPY in terms of returns. However, you should keep the downsides in mind. Compared to the SPY, QQQ experiences higher volatility due to its concentration in high-growth stocks.
It does pay a dividend, because it contains blue-chip stocks that are often reliable dividend stocks. All of the Dividend Aristocrats, a set of companies that have raised their dividends at least once a year for at least 25 years, are S&P 500 members, and thus VOO has exposure to all of them.
Liquidity and Trading Volume
VOO, while less liquid than SPY, still has substantial trading volume and liquidity that will meet the needs of most individual investors. However, it is less optimal for very high-frequency trading strategies compared to SPY.
Fidelity and Vanguard are neck and neck when it comes to keeping costs low. Overall, you might save money at Fidelity if you trade options, but Vanguard will be cheaper if mutual funds are your focus.
SPY, the world's most liquid ETF, trades $34 billion a day, on average. This gives investors the ability to tap into SPY's unmatched liquidity, which can help investors get in and out of markets fast, easily, and at a relatively attractive cost.
Vanguard S&P 500 ETF
SPY is more expensive with a Total Expense Ratio (TER) of 0.0945%, versus 0.03% for VOO. SPY is up 28.31% year-to-date (YTD) with +$7.13B in YTD flows. VOO performs better with 28.36% YTD performance, and +$103.99B in YTD flows.
S&P 500 Investment Time Machine
Imagine you put $1,000 into either fund 10 years ago. You'd be up to roughly 126.4% — or $3,282 — from VOO and 126.9% — or $3,302 — from SPY. That's not exactly wealthy, but it shows how you can more than triple your money by holding an asset with relatively low long-term risk.
Warren Buffett believes an S&P 500 index fund is the best way for most people to get stock market exposure. That's because buying individual stocks requires a level of commitment that exceeds what most investors are willing to undertake.
Average Return
In the past year, QQQ returned a total of 24.57%, which is slightly higher than VOO's 23.44% return. Over the past 10 years, QQQ has had annualized average returns of 18.38% , compared to 13.11% for VOO. These numbers are adjusted for stock splits and include dividends.
VOO typically provides a higher dividend yield compared to SPY. This aspect is particularly attractive to investors who prioritize income generation from their investments.
Top Warren Buffett Stocks
Bank of America (BAC), 766.3 million. Coca-Cola (KO), 400 million. Kraft Heinz (KHC), 325.6 million. Apple (AAPL), 300 million.
Should I buy or sell VOO ETF? The VOO ETF holds several negative signals and despite the positive trend, we believe VOO will perform weakly in the next couple of days or weeks. Therefore, we hold a negative evaluation of this ETF.
The average yearly return of the S&P 500 is 10.985% over the last 30 years, as of the end of December 2024. This assumes dividends are reinvested. Adjusted for inflation, the 30-year average stock market return (including dividends) is 8.262%.