Share This With The People You Care About! I would choose VOO because the expense ratio is lower compared to SPY. Range and standard deviation also increase as duration increases. Although still somewhat inexpensive compared to a mutual fund, they have fallen behind the low-fee leader Vanguard. So, which fund is better VOO or SPY? Not only is Vanguard famous for low fees and excellent products, but they have also strived to reduce fees even further in the past decade. Teach good habits instead of encouraging bad habits. SPDR S&P 500 ETF (SPY) SPY was one of the first ETFs, having been founded in 1993. Buying fractional shares allows you to maximize your investment. I’m also going to show you how to maximize your investments by purchasing fractional shares of these ETFs. VOO and SPY are both Exchange-Traded Funds (ETFs), which means there is no minimum investment. I chose to invest in VOO instead of SPY because of this lower expense ratio. Investor share funds have no minimum investment threshold. The SPDR S&P 500 ETF Trust (SPY) tracks the exact same index, the S&P 500. When I first looked at the time-series for the two funds (SPY and VOO), I saw that the curves were nearly identical with a slight share price offset. VOO holds 509 stocks and SPY holds 505. Unfortunately, since VOO is much younger than SPY we do not have a lot of historical data to include. The only major difference was in the expense ratios (the cost of owning the fund), where VOO costs 0.03%, while SPY is 0.09%. Both ETFs seek to track the returns of the S&P 500 Index. Together these five companies out of 500 make up nearly 20% of the fund’s total assets. Over an entire lifetime or career and depending on the initial investment, this can potentially be even more than an extra few thousand dollars for retirement. They are also both diversified with a similar number of stocks in their holdings. What’s striking at first sight is of course the similarity in returns each year. In this final section of the article, we’ll take all of the above differences we have examined and will see how they affect the ETFs’ overall return and performance. I examined two S&P 500 exchange-traded funds (ETF) to see what kind of returns investors can expect over time. SPY, on the other hand, has an expense ratio 0.09%. Hands-on real-world examples, research, tutorials, and cutting-edge techniques delivered Monday to Thursday. And of course, after some research, I found that it’s often echoed that it didn’t matter which one you buy since both are made up of the same companies with similar asset holdings. Another difference is VOO is a Vanguard ETF while SPY is not. Mid-cap stocks make up 12% and small-cap stocks fill the remaining non-visible 0.2%. Industry exposure can play a crucial role in balancing your portfolio and making sure you are not overexposed to one industry sector.

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