QQQ vs VOO: Side-by-Side ETF Comparison

QQQ vs VOO comes down to growth focus versus broad market exposure - QQQ's tech-heavy NASDAQ-100 composition delivered 17.5% returns but costs 0.20% annually, while VOO's S&P 500 tracking provides more diversification with financials included, yielding 1.13% dividends at just 0.03% expense ratio. The choice depends on whether you want concentrated tech exposure or total large-cap market representation.

Table of Content

• Annual & Cumulative Returns
• Risk Metrics
• Dividend Yield & Growth
• Fees & Liquidity
• ETF Composition: Asset Classes
• Regional Allocation
• Sector Weights
• Top 10 Holdings
• Valuation & Growth Metrics
• Which ETF Fits Your Portfolio?

ETF Issuers & Investment Objective

QQQ comes from Invesco and tracks the NASDAQ-100, which means you're buying the 100 largest non-financial stocks listed on the NASDAQ. The portfolio leans hard into tech at 51.3% of assets, with communication services and consumer cyclicals rounding out the top three. This concentration isn't accidental - the fund's objective is to mirror that growth-oriented index exactly, even when it means holding a third of assets in just ten names.

VOO offers the opposite philosophy through Vanguard's S&P 500 tracker. The fund owns the entire large-cap market in a single wrapper, spreading across 500 companies with tech at a more moderate 35.1% weighting. Where QQQ bets on innovation stocks, VOO simply buys the whole market at market weights and charges almost nothing for the privilege - 0.03% versus QQQ's 0.20%. The numbers tell the story: QQQ's 25.08 P/E suggests investors pay a premium for that growth focus, while VOO's 22.44 multiple reflects the broader market's valuation.

Annual & Cumulative Returns

QQQ's tech-heavy portfolio has delivered noticeably stronger returns over every major timeframe. The gap widens significantly over longer periods, with QQQ's 20.51% annual return over the past decade outpacing VOO by nearly five percentage points annually. Even the narrower one-year window shows QQQ ahead by more than three points. The consistency stands out here - QQQ hasn't just won, it's won across the board.

The trade-off becomes apparent when you consider what drives these numbers. QQQ's 51% technology allocation (versus VOO's 35%) creates more concentration risk, but that's exactly what's powered the outperformance during tech's dominance. VOO's broader diversification - including that 13% financial services stake QQQ lacks - means more balanced exposure when market leadership rotates. For investors, this translates to a simple choice: accept QQQ's higher volatility for the chance at superior long-term returns, or take VOO's steadier path with likely lower upside.

Risk Metrics

QQQ's volatility runs about 40% higher than VOO across both time frames - 15.6% versus 11% over one year, and a similar spread over three years. That extra bumpiness comes with the territory when half your portfolio sits in technology stocks. The Sharpe ratio tells a more interesting story: QQQ earned 1.61 versus VOO's 1.4, meaning investors collected more return per unit of risk despite the higher volatility. Tech's recent run pushed QQQ's one-year gain to 17.5% against VOO's 14.4%, which helps explain the better risk-adjusted performance.

For investors, this translates to a clear trade-off. QQQ gives you higher potential returns but requires stomaching considerably larger price swings - think 20% drawdowns instead of 14%. The Sharpe ratios suggest tech bulls have been rewarded for taking that extra risk, though past performance won't guarantee this relationship holds. If you can handle watching your investment drop $15,000 on a $100,000 position instead of $11,000, QQQ's risk-reward profile might work. Otherwise, VOO's smoother ride and broader diversification offer a more sleep-friendly alternative.

Dividend Yield & Growth

QQQ's 0.46% yield looks paltry next to VOO's 1.13%, and that's exactly what you'd expect from a tech-heavy growth fund. The NASDAQ-100 companies that dominate QQQ simply prefer to reinvest earnings into expansion rather than pay dividends, while VOO's broader S&P 500 holdings include plenty of mature firms that return cash to shareholders. Both pay quarterly, though Vanguard doesn't specify frequency for VOO - it's the standard quarterly schedule you'd expect from an S&P 500 tracker.

This 2.5x difference in yield isn't trivial. On a $100,000 investment, VOO throws off $1,130 annually while QQQ pays just $460. For retirees or income-focused investors, that $670 gap matters more than the expense ratio difference between these funds. But QQQ investors aren't buying it for the dividend - they're betting on price appreciation from tech giants that happen to pay minimal dividends. If you need current income, VOO clearly wins. If you're building wealth and don't mind lower payouts, QQQ's growth tilt might suit you better.

Fees & Liquidity

The fee difference hits harder than most investors expect. QQQ charges 0.20% annually while VOO takes just 0.03% - that's nearly seven times more expensive for every dollar invested. On a $10,000 position, you're paying $20 yearly for QQQ versus $3 for VOO. Scale that up to a six-figure portfolio and you're looking at hundreds of dollars in extra fees each year, which compounds into real money over decades.

Both ETFs trade millions of shares daily, so bid-ask spreads stay tight and you won't get stuck trying to exit a position. The liquidity difference shows up in the dividend yield though - VOO's 1.13% yield gives you more cash back compared to QQQ's 0.46%. For buy-and-hold investors, that fee gap might not matter if QQQ's tech-heavy approach delivers better returns. But if you're dollar-cost averaging or building a core holding, VOO's rock-bottom expenses keep more of your money working for you.

ETF Composition: Asset Classes

QQQ's portfolio is almost entirely US stocks at 96.3%, with just 3.6% allocated internationally - a reflection of its NASDAQ-100 focus on domestic tech giants. The fund holds virtually no cash at 0.07%, keeping nearly every dollar invested. VOO takes this domestic concentration even further with 99.1% in US stocks, leaving barely half a percent in international exposure. This makes sense given its S&P 500 mandate, which tracks large US companies almost exclusively.

The practical difference is minimal for most investors, as both funds offer pure US equity exposure with negligible cash drag. VOO's slightly higher cash position of 0.22% won't move the needle on returns, though it does represent a tiny buffer that QQQ lacks. Neither fund provides meaningful international diversification, so investors seeking global exposure would need to supplement with other holdings. These allocations confirm what the funds' descriptions suggest: QQQ and VOO are vehicles for betting on American large-cap stocks, with QQQ's tech tilt and VOO's broader market representation being the key differentiators rather than geographic mix.

Regional Allocation

Both ETFs are overwhelmingly US-focused, but QQQ leaves slightly more room for international exposure. While 97.6% of QQQ's holdings are based in North America, that 2.4% overseas slice adds up to companies like ASML, AstraZeneca and a handful of Latin American tech names. VOO is even more domestic at 99.5% North American exposure, essentially treating the S&P 500 as a closed universe.

The practical difference is modest: either fund gives you a pure-play on large-cap America, and the foreign weighting is too small to hedge currency risk or provide meaningful diversification. What matters more is how that tiny overseas gap is filled. QQQ's 0.58% Latin America stake and 0.38% emerging Asia tilt come mainly from ADRs of growth-oriented tech or consumer names, while VOO's 0.38% developed Europe is dominated by multinationals that still earn most of their revenue in dollars. Unless you're running a very precise asset-location model, the geographic gap between the two won't move the needle on portfolio risk.

Sector Weights

QQQ's sector allocation tells you everything about its identity: more than half the fund sits in technology stocks, with another 16% in communication services. That's two-thirds of the portfolio riding on essentially the same growth-oriented theme. The fund barely touches financial services at 0.3% and essentially ignores energy, real estate, and utilities. This concentration explains both QQQ's recent outperformance and its volatility - when tech stumbles, there's little else to cushion the fall.

VOO spreads its bets more evenly across the economy. Technology still leads at 35%, but financial services claims a meaningful 13% and healthcare adds another 9.6%. The fund holds at least some exposure in every sector, including 2.8% in energy and 2.3% in utilities. This broader diversification means VOO won't capture tech rallies as aggressively as QQQ, but it won't suffer as severely when sentiment shifts away from growth stocks either.

Top 10 Holdings

QQQ's top five holdings command 30.7% of the portfolio, with NVIDIA alone soaking up 8.6 cents of every dollar invested. That single-stock weight is nearly triple what the same chipmaker receives in VOO, where the top five positions add up to a more modest 27.7%. Both funds own the same tech giants, but QQQ's Nasdaq-100 mandate lets the biggest names run even bigger, so Apple and Microsoft sit at 7% and 6.4% versus 6.9% and 6.2% in the S&P tracker.

The overlap means you're getting a similar who's who of U.S. tech, yet the concentration gap shows up in day-to-day moves. When NVIDIA rallied or sold off this year, QQQ felt the swing about 11% more than VOO did, a difference that compounds over time. If you like the idea of letting winners keep ballooning, QQQ delivers that in spades; if you'd rather have the index police gently trimming the giants back toward 7%, VOO's broader 500-stock pool does the job automatically.

Valuation & Growth Metrics

QQQ trades at a clear premium across every valuation metric: 25.1× earnings versus 22.4× for VOO, 6.4× book compared with 4.6×, and 5.0× sales next to 3.2×. Those higher multiples are the price you pay for the index’s tech-heavy tilt 51 % of assets sit in technology names whose margins and expansion rates have historically justified richer pricing. Whether the premium is “worth it” depends on how much faith you place in those margins staying wide; any compression would hit QQQ faster than the broader market.

Growth spreads tell a similar story. Long-term earnings expectations are almost identical 10.8 % for QQQ, 10.5 % for VOO yet the Nasdaq portfolio has delivered trailing earnings growth of 15.8 % a year, trouncing the S&P 500’s 10.2 %. Sales growth shows the same pattern, 8.3 % versus 8.0 %. In short, QQQ’s loftier valuations are backed by faster realized growth, but the gap is narrowing, and the cushion for disappointment is thinner.

Which ETF Fits Your Portfolio?

QQQ makes sense if you want to overweight the market’s growth engine. Its 17.5% one-year gain and 51% tech weighting tilt the portfolio toward the fastest-moving large caps, but you pay 0.20% a year for that focus and accept a skinny 0.46% dividend. VOO, at 0.03% expense and a 1.13% yield, gives you the whole S&P 500: still plenty of tech (35%) yet cushioned by finance, health-care and consumer staples that soften the drawdowns, which shows up in the slightly lower 14.4% recent return.

Pick the one that matches the role you need filled. Want a satellite holding that punches above its weight when Nasdaq leaders run? Carve out a slice for QQQ and accept the extra volatility. Prefer a single, low-cost core that you can hold for decades without second-guessing sector booms and busts? VOO does that job for less than a nickel per thousand dollars invested. Either choice works; just know what you’re hiring it to do.

If you want to have look at other ETF comparisons, check out this: Fund Overlap Tool

Data sources: The data has been obtained from the ETF provider's website and ETF fact sheet.