Key Points
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VOO charges much lower fees and offers a higher dividend yield compared to QQQ.
-
QQQ has delivered stronger five-year growth but with higher volatility and a deeper drawdown.
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VOO holds a broader slice of the U.S. market, while QQQ is more concentrated in technology companies.
The Invesco QQQ Trust, Series 1 ETF (NASDAQ:QQQ) and the Vanguard S&P 500 ETF (NYSEMKT:VOO) are two of the most popular exchange-traded funds. Each offers exposure to large-cap U.S. stocks, but with distinct approaches.
QQQ tracks the NASDAQ-100 Index, which is heavily weighted toward technology, while VOO follows the S&P 500 Index. This comparison highlights key differences in cost, performance, risk, and portfolio construction to help investors decide which ETF may appeal more to their goals.
Snapshot (cost & size)
|
Metric |
QQQ |
VOO |
|---|---|---|
|
Issuer |
Invesco |
Vanguard |
|
Expense ratio |
0.20% |
0.03% |
|
1-yr return (as of Dec. 18, 2025) |
13.66% |
11.99% |
|
Dividend yield |
0.46% |
1.12% |
|
Beta (5Y monthly) |
1.19 |
1.00 |
|
AUM |
$403 billion |
$1.5 trillion |
Beta measures price volatility relative to the S&P 500. The 1-yr return represents total return over the trailing 12 months.
VOO stands out as the more affordable option, with a much lower expense ratio compared to QQQ. VOO also offers a higher dividend yield, which may appeal to income-focused investors.
Performance & risk comparison
|
Metric |
QQQ |
VOO |
|---|---|---|
|
Max drawdown (5 y) |
-35.12% |
-24.53% |
|
Growth of $1,000 over 5 years |
$1,959 |
$1,819 |
What’s inside
VOO aims to replicate the S&P 500 Index, providing diversified exposure across 505 holdings. Its top sectors include technology (making up 37% of the fund’s total assets), financial services (13%), and consumer cyclical (11%).
Its largest positions are Nvidia, Apple, and Microsoft. With a fund age of more than 15 years, VOO offers a seasoned, broad-market approach without notable quirks or unusual restrictions.
QQQ, on the other hand, is concentrated in the NASDAQ-100, with 101 holdings and a strong tilt toward technology (55%), followed by communication services (17%), and consumer cyclicals (13%).
Its top three holdings match VOO’s, but they each make up a larger percentage of the portfolio — making it more top-heavy and growth-oriented than VOO.
For more guidance on ETF investing, check out the full guide at this link.
What this means for investors
While VOO’s broad-market focus aims for consistency and stability, QQQ’s primary goal is growth. When deciding between the two funds, the best choice for you will depend on your risk tolerance and investing goals.
Because VOO tracks the S&P 500, it’s much more diversified across sectors. Although it does have a notable tilt toward the technology sector, it’s not as strong as QQQ’s — which can help reduce risk during periods of market volatility.
The downside to an S&P 500 ETF like VOO, however, is that it can’t earn higher-than-average returns. It aims to simply follow the market, so its returns can only be average.
QQQ, on the other hand, is designed for above-average returns, focusing heavily on growth-oriented stocks. While that has resulted in higher earnings over the past five years compared to VOO, it’s also led to steeper drawdowns and more significant price volatility.
More risk-averse investors may prefer VOO’s S&P 500 stability, while those seeking higher total returns may opt for a growth fund like QQQ. Both ETFs are excellent choices for many investors, and considering your goals and risk tolerance can help you determine which one is the best fit for your portfolio.
Glossary
ETF (Exchange-Traded Fund): An investment fund traded on stock exchanges, holding a basket of assets like stocks or bonds.
Expense ratio: The annual fee, as a percentage of assets, that a fund charges to cover operating costs.
Dividend yield: Annual dividends paid by a fund or stock, expressed as a percentage of its current price.
Beta: A measure of an investment’s volatility compared to the overall market; higher beta means more volatility.
AUM (Assets Under Management): The total market value of assets that a fund manages on behalf of investors.
Max drawdown: The largest percentage drop from a fund’s peak value to its lowest point over a specific period.
NASDAQ-100 Index: A stock market index of 100 major non-financial companies listed on the NASDAQ exchange, heavily weighted in technology.
S&P 500 Index: A stock market index tracking 500 leading publicly traded companies in the U.S., across various sectors.
Sector: A group of companies with similar business activities, such as technology, financial services, or consumer cyclicals.
Holdings: The individual stocks or assets that make up a fund or portfolio.
Drawdown: The decline in value from a fund’s peak to its subsequent low, showing potential loss during downturns.
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Katie Brockman has positions in Vanguard S&P 500 ETF. The Motley Fool has positions in and recommends Apple, Microsoft, Nvidia, and Vanguard S&P 500 ETF. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.