SPY vs VOO: Side-by-Side ETF Comparison

SPY vs VOO: Both track the S&P 500 almost identically (14.36% vs 14.43% 1-year returns), but VOO charges 0.03% while SPY costs 0.10% - that's $7 more per $10,000 invested annually. Unless you need SPY's higher trading volume for frequent trades, VOO's lower fee keeps more money in your pocket.

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

SPY comes from State Street Global Advisors, the firm that effectively invented the ETF industry back in 1993 when it launched this very fund. State Street structures SPY as a unit investment trust, which means the fund must fully replicate the S&P 500 and can't lend out securities to generate extra income. The trust description spells this out plainly: it holds every stock in the index at virtually identical weights, no deviations allowed.

Vanguard's VOO offers the same core exposure but with more flexibility. The fund can use sampling techniques rather than perfect replication, and Vanguard can lend portfolio securities to earn additional revenue for shareholders. This structural difference helps explain why VOO charges just 0.03% annually while SPY still costs 0.10%. Both funds own the same 500 companies with nearly identical sector weights - technology makes up roughly a third of each portfolio - but Vanguard's approach gives it room to operate more efficiently. For investors, this means you'll pay about $3 per $10,000 invested with VOO versus $10 with SPY for what amounts to the same market exposure.

Annual & Cumulative Returns

The performance gap between SPY and VOO remains remarkably tight across every time period, though VOO consistently edges ahead by a few basis points. Over the past year, VOO's 14.43% return beat SPY's 14.36% by just 0.07% - essentially a rounding difference that won't move the needle for most portfolios. This pattern holds through longer stretches too, with VOO's 10-year annualized return of 15.69% barely outpacing SPY's 15.63%. The spread widens slightly over three years where VOO's 21.51% annualized gain tops SPY's 21.41%, but we're still talking about less than 0.1% per year.

What makes these tiny differences interesting is they compound over time. VOO's slight edge likely stems from its lower 0.03% expense ratio versus SPY's 0.10% fee - that seven basis point annual savings shows up in the returns. For a $100,000 investment held ten years, the difference works out to roughly $700 in extra gains with VOO. Not life-changing money, but real dollars that add up for long-term holders. Both funds track the same index with nearly identical sector weights, so picking between them often comes down to whether that extra cost matters to you and which brokerage platform you prefer.

Risk Metrics

The risk metrics tell a story of near-identical twins. Both SPY and VOO show 1-year volatility within a hair's breadth of each other at 10.98% and 10.99% respectively, meaning you'd have experienced essentially the same ride-up and down over the past twelve months regardless of which fund you held. The 3-year picture reinforces this pattern with volatility sitting at 11.94% for SPY versus 11.96% for VOO - a difference so small it could vanish with rounding.

Sharpe ratios paint a similar picture of functional equivalence. VOO edges out SPY with a 1.4 ratio compared to 1.39, suggesting marginally better risk-adjusted returns over three years. But this sliver of outperformance amounts to pennies on the dollar in real-world impact. For investors choosing between these two S&P 500 trackers, risk characteristics shouldn't drive the decision - the volatility experience will be virtually identical, and any risk-adjusted return advantage is too minimal to matter.

Dividend Yield & Growth

VOO's 1.13% yield edges out SPY's 1.07% by six basis points - a small but meaningful gap that compounds over time. Both funds pay quarterly, so the difference comes down to VOO's lower 0.03% expense ratio leaving more cash for distributions. That's roughly $6 more per year on a $10,000 investment, which isn't life-changing but does add up.

The yields themselves reflect the broader market's modest dividend landscape - neither ETF will satisfy investors chasing high income. What matters more is consistency: both track the same 500 companies, so their dividend streams rise and fall with corporate America's profitability. VOO's slight yield advantage, combined with its lower fees, makes it the more efficient choice for dividend-focused investors who still want broad S&P 500 exposure.

Fees & Liquidity

VOO's 0.03% expense ratio saves investors 6.5 basis points annually compared with SPY's 0.095% fee. On a $100,000 position, that's $65 each year - hardly life-changing money, but the gap compounds over decades. The difference stems from SPY's structure as a unit investment trust, an older format with slightly higher administrative costs that State Street hasn't bothered to change given the fund's $500+ billion asset base.

Trading costs flip the script. SPY's average daily volume of 70 million shares creates razor-thin bid-ask spreads, often just a penny wide. VOO trades closer to 4 million shares daily, so spreads can widen to 2-3 cents during volatile periods. For buy-and-hold investors, VOO's lower fee wins. Active traders or institutions moving millions might find SPY's liquidity worth the extra 0.065% in annual expenses.

ETF Composition: Asset Classes

Both SPY and VOO keep things simple: each parks more than 99% of its assets in U.S. common stocks. The tiny slivers labeled “non-U.S.” (about 0.53% for either fund) come from the handful of S&P 500 constituents that are domiciled abroad but trade domestically think of them as accounting noise, not a bet on foreign markets.

The only real difference is the cash pocket. SPY holds roughly 34 basis points in cash, while VOO keeps just 21 basis points, plus another 18 basis points in “other” securities (largely index futures used for cash equititization). That slightly tighter cash drag helps VOO shave a hair off tracking error and may explain why its one-year return beat SPY by seven basis points despite following the same index.

Regional Allocation

Both SPY and VOO park essentially their entire portfolios on U.S. soil 99.47 % for SPY and 99.48 % for VOO so you won’t get any foreign-diversification benefit from either fund. The sliver that sits outside North America is a rounding-error mix of U.K. listings (0.03 %), developed Europe (0.38 %) and emerging Asia (0.12 %). That tiny footprint comes from a handful of S&P 500 constituents that are legally domiciled abroad yet still trade primarily in New York, so the “international” slice is more a quirk of corporate tax addresses than a true overseas tilt.

The practical takeaway: if you already own a plain-vanilla S&P 500 ETF, you’re already betting almost entirely on the U.S. economy no matter which ticker you pick. SPY’s overseas weight is 0.53 %, VOO’s is 0.52 % a difference of one-hundredth of a percentage point, small enough to ignore. Neither fund gives you a hedge against dollar weakness or exposure to faster-growing regions, so anyone wanting genuine geographic balance will need to pair either ETF with an international or emerging-market holding rather than relying on these residual crumbs.

Sector Weights

The sector breakdowns are nearly identical, which makes sense since both funds track the same index. Technology dominates at roughly 34-35% for each fund, followed by financial services around 13%. The differences that do exist are marginal - VOO holds about one percentage point more in tech (35.1% vs 34.2%) while SPY has slightly more in energy and industrials. These tiny variations likely reflect different sampling methods or timing of rebalancing rather than any strategic divergence.

For practical purposes, these sector weights won't meaningfully impact your portfolio. The 0.9% difference in technology allocation between the two funds is negligible - on a $10,000 investment, that's just $90. Both ETFs will give you essentially the same sector exposure to the S&P 500, so this shouldn't factor into your decision between them.

Top 10 Holdings

Both ETFs track the same index, yet VOO gives slightly more weight to the big three - NVIDIA at 7.75% versus SPY's 7.59%, Apple at 6.87% versus 6.20%, and Microsoft at 6.15% versus 5.66%. This isn't a dramatic tilt, but it does mean VOO investors have marginally higher exposure to these tech giants that have driven much of the market's recent returns.

The concentration differences extend beyond just percentages. With over 35% of assets in technology stocks compared to SPY's 34.2%, VOO leaves investors a touch more exposed to sector-specific volatility. For long-term holders, these minor variations won't meaningfully impact returns - both funds own the same companies after all. But if you're weighing the two, consider whether that extra fraction of a percent in megacap tech aligns with your risk tolerance, especially given how these stocks have carried the index lately.

Valuation & Growth Metrics

SPY and VOO are neck-and-neck on price: both trade at about 22.3-times trailing earnings and 4.5-times book value, differences of less than 1 percent. That tight spread makes sense both funds own the identical S&P 500 basket yet the slight premium on VOO (0.7 percent higher P/E, 1.7 percent higher P/B) simply reflects the random timing of index rebalances and cash drag, not better prospects. Either way, investors are paying the same broad-market multiple and getting the same 8 percent long-term sales growth.

Earnings tell the same story. Portfolio companies inside both ETFs are expected to grow profits just under 10.5 percent a year, while historical earnings growth hovers around 10.2 percent. With valuations and growth profiles essentially cloned, the only real differentiator left is cost: SPY’s 0.10 percent expense ratio versus VOO’s 0.03 percent. Over a decade that seven-basis-point gap compounds to real money, so unless you need SPY’s superior liquidity for frequent trading, VOO keeps a hair more of your returns.

Which ETF Fits Your Portfolio?

Both ETFs deliver what you'd expect from S&P 500 trackers: near-identical sector weights and one-year performance separated by just seven basis points (14.43% for VOO, 14.36% for SPY). The real fork in the road shows up in the fee column. VOO's 0.03% expense ratio means you keep $3 of every $10,000 invested, while SPY charges $9.60. That 0.07-percentage-point gap sounds tiny, but on a $100,000 position over ten years it compounds to roughly $700 lost to fees money that could have stayed in your pocket.

Choose SPY if you want the deepest options market and don't mind paying for it; the fund's liquidity is unbeatable for traders. Buy VOO if you're a long-term holder who'd rather capture the extra seven basis points of yield (1.13% vs 1.07%) and let the fee savings quietly compound. Either way you're getting the same 500 stocks; the decision comes down to whether liquidity or cost matters more for how you invest.

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.