SPY vs. VOO — ETF Comparison - Stock Analysis (2024)

FAQs

SPY vs. VOO — ETF Comparison - Stock Analysis? ›

In the past year, SPY returned a total of 28.87%, which is slightly lower than VOO's 28.99% return. Over the past 10 years, SPY has had annualized average returns of 12.71% , compared to 12.77% for VOO. These numbers are adjusted for stock splits and include dividends.

VOO has a consensus rating of Moderate Buy which is based on 400 buy ratings, 100 hold ratings and 4 sell ratings. What is VOO's price target? The average price target for VOO is $537.65. This is based on 504 Wall Streets Analysts 12-month price targets, issued in the past 3 months.

You only need one S&P 500 ETF

You could be tempted to buy all three ETFs, but just one will do the trick. You won't get any additional diversification benefits (meaning the mix of various assets) because all three funds track the same 500 companies.

Low expenses: The SPY ETF has a low expense ratio of 0.09%, which is much lower than average mutual fund expenses, which are often 0.50% or more. Diversification: By investing in the SPY ETF, investors gain access to 500 of the largest publicly traded companies in the U.S. across 11 different sectors.

VOO-Vanguard S&P 500 ETF.

Vanguard S&P offers a lower expense ratio (0.035%) than SPY (0.095%), which means lower costs for investors and potentially higher net returns over the long term. VOO might be the more economical choice for cost-conscious investors, especially those investing large sums or planning for long-term goals like retirement.

Vanguard High Dividend Yield ETF (VYM)

The better Vanguard ETF for their needs is likely VYM, which delivers a higher 2.9% 30-day SEC yield by targeting the FTSE High Dividend Yield Index. It also charges the same expense ratio as VIG does, at 0.06%.

Meanwhile, if you only invest in S&P 500 ETFs, you won't beat the broad market. Rather, you can expect your portfolio's performance to be in line with that of the broad market. But that's not necessarily a bad thing. See, over the past 50 years, the S&P 500 has delivered an average annual 10% return.

The historical average yearly return of the S&P 500 is 9.88% over the last 20 years, as of the end of April 2024. This assumes dividends are reinvested. Adjusted for inflation, the 20-year average stock market return (including dividends) is 7.13%.

Experts agree that for most personal investors, a portfolio comprising 5 to 10 ETFs is perfect in terms of diversification.

Which ETF is beating the S&P 500? ›

The Invesco QQQ Trust (QQQ -0.02%) has produced a total return of 460% in the past 10 years, easily crushing the S&P 500's gain.

Track Record and Longevity. The SPY ETF has been in existence for over 28 years, making it one of the oldest and most established ETFs. Its long track record and performance history provide investors with confidence in its ability to track the S&P 500 Index accurately.

Vanguard World Fund - Vanguard Mega Cap ETF

It is one of the cheapest ways to invest in the S&P 500. But there's another low-cost Vanguard Fund that is beating both the S&P 500 and the Nasdaq Composite year to date -- the Vanguard Mega Cap ETF (MGC -0.32%).

For example, the minimum investment for VFIAX is $3,000, while there is no minimum investment for VOO. Expense ratios: VVOO has an expense ratio of 0.03%, while VFIAX has an expense ratio of 0.04%.

SPDR S&P 500 ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, SPY is a sufficient option for those seeking exposure to the Style Box - Large Cap Blend area of the market.

Is Vanguard S&P 500 ETF good to invest in? The Vanguard S&P 500 ETF is a very good investment. The ETF provides low-cost exposure to the S&P 500, a leading market index. It allows you to earn market-matching returns, which have averaged about 10% annually over the long term.

First, VOO has a clear advantage in terms of expense ratio. VOO's expense ratio is 0.03% compared to 0.20% of QQQ, which is more than three times cheaper. Next is diversification. While both ETFs are well diversified, VOO is less concentrated in both industry and top 10 holdings.

Vanguard S&P 500 ETF (VOO)

Expense ratio: 0.03 percent. That means every $10,000 invested would cost $3 annually. Who is it good for?: Great for investors looking for a broadly diversified index fund at a low cost to serve as a core holding in their portfolio.

Both have the same expense ratio and similar dividend yield, so you should choose whichever one you prefer based on the fund's strategy. If you only want to own the biggest and safest companies, choose VOO. If you want broader exposure and more diversification, choose VTI.