Both are fine. VOO has a lower expense ratio so might as well save yourself some fees if holding long term. Spy is usually more preferred if you are going to be day trading due to the higher volume.
Spy has much higher volume and liquidity and as a result is much better for options based strategies like writing covered calls. That's like the only real reason for SPY over VOO imo as you mentioned they are nearly identical besides expense ratio in every other way.
VOO is the lowest fee fund that tracks the $&P 500. If you want to invest in the S&P, then VOO is better than SPY, due to the lower fees. VGT seeks to track the performance of the MSCI US Investable Market Information Technology 25/50 Index. Put them both into Portfolio Visualiser and compare them.
SPY is the largest and oldest US ETF, launching in 1993 and now with assets of over $360 billion (as of 8 September 2022). SPY's index, the S&P 500, has an estimated $15.6 trillion¹ indexed or benchmarked to it, which further adds to SPY's immense liquidity.
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.
Buffett's biggest moneymaking ETF
Berkshire owns 39,400 shares of the SPDR S&P 500 ETF Trust (SPY 0.15%), which is currently valued at nearly $22.6 billion. It also owns 43,000 shares of the Vanguard S&P 500 ETF (VOO 0.14%), valued at nearly $22.7 billion. Both ETFs attempt to track the performance of the S&P 500.
choosing between QQQ and SPY boils down to your investment goals, risk tolerance and portfolio strategy. If you're looking for an ETF that offers exposure to high growth companies, with a focus on technology and internet-related stocks, then the QQQ that tracks the NASDAQ-100 may be a better option for you.
Average Return
In the past year, QQQ returned a total of 25.74%, which is slightly higher than VOO's 24.33% return. Over the past 10 years, QQQ has had annualized average returns of 18.26% , compared to 13.04% for VOO. These numbers are adjusted for stock splits and include dividends.
Many find that SPX options offer a tax advantage because of the way the IRS treats SPY options and SPX options differ from one another. During a long-term tax rate, investors are usually allowed 60% of the profits from trade when using SPX options.
Day trading SPY options is a very good opportunity in the market for traders that don't have the time to look at multiple different tickers throughout the day or to analyze them.
But again, to repeat ourselves, SPY options trading is extremely difficult to make money on. You can even lose money when you are right about the market direction because a big part of the option price is implied volatility and time.
Currently there's no upside potential for VOO, based on the analysts' average price target. Is VOO a Buy, Sell or Hold? VOO has a consensus rating of Moderate Buy which is based on 401 buy ratings, 100 hold ratings and 5 sell ratings.
Buy and hold SPY in a portfolio to potentially capture long-term growth. SPY can help you get in and out of markets fast, easily, and at a relatively attractive cost. With SPY, you can stay invested in the broad US equity market while you determine your next investment move.
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.
QQQ holdings are dominated by big technology-related companies such as Apple, Amazon, Google, and Meta. The QQQ ETF offers investors big rewards during bull markets, with the potential for long-term growth, ready liquidity, and low fees.
Index Top Holdings as of Jan 10 2025
Apple Inc. Amazon.com Inc. Tesla Inc. Broadcom Inc.
Better performance track record
Berkshire Hathaway indisputably has a better performance track record than S&P 500 ETFs. Its year-to-date gain in 2024 is nearly double that of the two most heavily traded S&P 500 ETFs, the SPDR S&P 500 ETF Trust (NYSEMKT: SPY) and Vanguard S&P 500 ETF.
One potential timeless index fund you can buy and hold forever is the Vanguard S&P 500 ETF (VOO 1.29%). This exchange-traded fund (ETF) is my favorite index fund to gain exposure to the S&P 500 index, arguably the most extraordinary market index in the world.
The key difference between these three ETFs is their expense ratio – SPY has an annual expense ratio of 0.0945% while VOO and IVV charges 0.03%. Although insignificant, the 0.06% difference can directly affect your overall returns.
Warren Buffett has said that 90 percent of the money he leaves to his wife should be invested in stocks, with just 10 percent in cash. Does that work for non-billionaires? As far as asset allocation advice goes, 90 percent in stocks sounds pretty aggressive.
Buffett knows average investors would struggle to replicate his returns by picking individual stocks, so he often recommends they buy exchange-traded funds (ETFs) instead. And Berkshire has two in its portfolio: the Vanguard S&P 500 ETF (VOO 0.13%), and the SPDR S&P 500 ETF Trust.