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VOO fees a lot decrease charges and provides the next dividend yield in comparison with QQQ.
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QQQ has delivered stronger five-year progress however with larger volatility and a deeper drawdown.
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VOO holds a broader slice of the U.S. market, whereas QQQ is extra concentrated in expertise firms.
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These 10 shares might mint the subsequent wave of millionaires ›
The Invesco QQQ Belief, Sequence 1 ETF (NASDAQ:QQQ) and the Vanguard S&P 500 ETF (NYSEMKT:VOO) are two of the preferred exchange-traded funds. Every provides publicity to large-cap U.S. shares, however with distinct approaches.
QQQ tracks the NASDAQ-100 Index, which is closely weighted towards expertise, whereas VOO follows the S&P 500 Index. This comparability highlights key variations in value, efficiency, danger, and portfolio building to assist buyers determine which ETF might enchantment extra to their targets.
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Metric
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QQQ
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VOO
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Issuer
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Invesco
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Vanguard
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Expense ratio
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0.20%
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0.03%
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1-yr return (as of Dec. 18, 2025)
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13.66%
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11.99%
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Dividend yield
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0.46%
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1.12%
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Beta (5Y month-to-month)
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1.19
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1.00
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AUM
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$403 billion
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$1.5 trillion
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Beta measures value volatility relative to the S&P 500. The 1-yr return represents whole return over the trailing 12 months.
VOO stands out because the extra reasonably priced possibility, with a a lot decrease expense ratio in comparison with QQQ. VOO additionally provides the next dividend yield, which can enchantment to income-focused buyers.
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Metric
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QQQ
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VOO
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Max drawdown (5 y)
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-35.12%
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-24.53%
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Progress of $1,000 over 5 years
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$1,959
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$1,819
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VOO goals to duplicate the S&P 500 Index, offering diversified publicity throughout 505 holdings. Its prime sectors embody expertise (making up 37% of the fund’s whole belongings), monetary providers (13%), and client cyclical (11%).
Its largest positions are Nvidia, Apple, and Microsoft. With a fund age of greater than 15 years, VOO provides a seasoned, broad-market strategy with out notable quirks or uncommon restrictions.
QQQ, alternatively, is concentrated within the NASDAQ-100, with 101 holdings and a robust tilt towards expertise (55%), adopted by communication providers (17%), and client cyclicals (13%).
Its prime three holdings match VOO’s, however they every make up a bigger share of the portfolio — making it extra top-heavy and growth-oriented than VOO.
For extra steerage on ETF investing, try the total information at this hyperlink.
Whereas VOO’s broad-market focus goals for consistency and stability, QQQ’s major aim is progress. When deciding between the 2 funds, the only option for you’ll rely in your danger tolerance and investing targets.
As a result of VOO tracks the S&P 500, it is far more diversified throughout sectors. Though it does have a notable tilt towards the expertise sector, it isn’t as robust as QQQ’s — which may also help cut back danger during times of market volatility.
The draw back to an S&P 500 ETF like VOO, nonetheless, is that it might probably’t earn higher-than-average returns. It goals to easily observe the market, so its returns can solely be common.
QQQ, alternatively, is designed for above-average returns, focusing closely on growth-oriented shares. Whereas that has resulted in larger earnings over the previous 5 years in comparison with VOO, it is also led to steeper drawdowns and extra important value volatility.
Extra risk-averse buyers might desire VOO’s S&P 500 stability, whereas these in search of larger whole returns might go for a progress fund like QQQ. Each ETFs are wonderful decisions for a lot of buyers, and contemplating your targets and danger tolerance may also help you identify which one is the perfect match on your portfolio.
ETF (Trade-Traded Fund): An funding fund traded on inventory exchanges, holding a basket of belongings like shares or bonds.
Expense ratio: The annual charge, as a share of belongings, {that a} fund fees to cowl working prices.
Dividend yield: Annual dividends paid by a fund or inventory, expressed as a share of its present value.
Beta: A measure of an funding’s volatility in comparison with the general market; larger beta means extra volatility.
AUM (Belongings Below Administration): The whole market worth of belongings {that a} fund manages on behalf of buyers.
Max drawdown: The biggest share drop from a fund’s peak worth to its lowest level over a selected interval.
NASDAQ-100 Index: A inventory market index of 100 main non-financial firms listed on the NASDAQ trade, closely weighted in expertise.
S&P 500 Index: A inventory market index monitoring 500 main publicly traded firms within the U.S., throughout numerous sectors.
Sector: A gaggle of firms with comparable enterprise actions, resembling expertise, monetary providers, or client cyclicals.
Holdings: The person shares or belongings that make up a fund or portfolio.
Drawdown: The decline in worth from a fund’s peak to its subsequent low, displaying potential loss throughout downturns.
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Katie Brockman has positions in Vanguard S&P 500 ETF. The Motley Idiot has positions in and recommends Apple, Microsoft, Nvidia, and Vanguard S&P 500 ETF. The Motley Idiot recommends the next choices: lengthy January 2026 $395 calls on Microsoft and brief January 2026 $405 calls on Microsoft. The Motley Idiot has a disclosure coverage.
VOO vs. QQQ: Is S&P 500 Stability or Tech-Targeted Progress the Higher Alternative for Traders? was initially revealed by The Motley Idiot
