VOO vs QQQ: Side-by-Side ETF Comparison

VOO vs QQQ boils down to breadth vs tech concentration: VOO gives you the whole S&P 500 at a rock-bottom 0.03% fee with 1.13% yield, while QQQ bets heavier on growth tech (51% allocation) and delivered a stronger 17.5% one-year return but costs 0.20% and pays just 0.46% yield. The 6.7x expense ratio difference and QQQ's tech-skewed risk profile are the main trade-offs to weigh.

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

Vanguard's VOO gives you the entire S&P 500 buffet at a rock-bottom 0.03% expense ratio - we're talking thirty cents per thousand invested. The fund holds all 500 stocks in their exact index weights, delivering the market's collective verdict on large-cap America. Technology makes up 35% of the portfolio, but you'll also get significant exposure to financials, healthcare, and every other major sector. It's the plain-vanilla choice that has historically captured about 80% of the total U.S. stock market's value.

Invesco's QQQ takes a different approach, tracking only the 100 largest non-financial companies listed on the NASDAQ. At 0.20% in fees, it's pricier than VOO but still reasonable for a tech-heavy growth play. The concentration shows: technology comprises over half the fund at 51.3%, with another 16% in communication services. This creates a portfolio that's essentially a bet on big tech and growth stocks - fewer holdings, higher P/E ratio at 25 versus VOO's 22.4, and about one-third the dividend yield at 0.46%.

Annual & Cumulative Returns

QQQ's tech-heavy portfolio has delivered noticeably higher returns over most time periods, with the gap widening the further back you look. The three-year stretch shows the starkest difference - QQQ's 29.94% annualized return versus VOO's 21.51% means nearly $8,500 more on a $10,000 investment. Even over five years, when both funds cooled off, QQQ maintained its edge at 14.54% versus 14.11%.

But these superior returns come with a catch: QQQ costs almost seven times more to own at 0.20% versus VOO's razor-thin 0.03% expense ratio. The recent performance gap has also narrowed significantly - the 1-year difference of 17.50% to 14.43% is modest compared to historical spreads. For investors weighing the choice, it's essentially a bet on whether big tech's dominance will continue justifying both the higher fees and richer valuations (QQQ trades at 25x earnings versus VOO's 22x).

Risk Metrics

QQQ's volatility runs about 4-5 points higher than VOO across both time frames - 15.64% versus 10.99% for the past year. That's the price you pay for the NASDAQ-100's tech concentration. The gap stays remarkably consistent at three years too, suggesting this isn't just a recent quirk. For investors, this means QQQ will likely deliver sharper swings in both directions, so your timing and stomach for losses matter more here.

Yet the Sharpe ratio tells a more nuanced story. QQQ's 1.61 reading actually beats VOO's 1.4, meaning you're getting better risk-adjusted returns despite the higher volatility. The fund's 17.5% one-year return versus VOO's 14.43% helps explain this - the extra return has compensated for the extra risk, at least recently. Still, that P/E of 25.08 versus 22.44 suggests you're paying a premium for QQQ's growth, and those ratios can shift quickly if tech sentiment changes.

Dividend Yield & Growth

VOO pays more than double the dividend yield of QQQ 1.13% versus 0.46% which means an investor with $10,000 would collect about $113 a year from the S&P 500 tracker and only $46 from the Nasdaq-100 cousin. That gap isn’t surprising: the Nasdaq-100 is stuffed with 51% technology names that prefer buybacks to cash payouts, while the S&P 500 still holds plenty of old-economy giants in financials and consumer staples that mail regular dividend checks.

Neither fund is built for income, yet the 0.67-percentage-point spread can matter if you’re drawing cash or reinvesting. QQQ does pay quarterly, so the smaller distributions arrive more frequently than VOO’s irregular schedule, but the dollar amounts are thin. Growth-focused investors rarely notice the difference, while retirees or yield-hunters will feel it in their pocketbooks.

Fees & Liquidity

The gap between these two funds' price tags is hard to ignore: QQQ’s 0.20% expense ratio is more than six times the 0.03% Vanguard charges for VOO. On a $10,000 position that’s $20 a year versus $3, and while neither figure will make or break a retirement plan, the difference compounds quietly. Ten grand left to grow at 8% for twenty years turns into about $46,600 inside VOO; the same return in QQQ, once the higher fee is skimmed each year, lands closer to $45,300. That’s real money you never see because it leaks out a few basis points at a time.

Trading costs tell the opposite story. QQQ’s $152 billion in assets and 44 million-share daily volume keep the bid-ask spread routinely below a penny, so you can move size without moving the market. VOO is even tighter often a third of a cent but its trading volume is roughly half, so impatient traders may notice a nickel or two of slippage on a market order in the first or last minutes of the session. Bottom line: buy-and-hold investors should care far more about the expense gap, while day-traders or monthly rebalancers might value QQQ’s extra liquidity more than the 0.17% annual toll.

ETF Composition: Asset Classes

VOO keeps things simple: 99% of its holdings are US stocks, with barely a sliver allocated elsewhere. This near-total domestic focus makes sense given its mandate to track the S&P 500, which only includes American companies. The tiny 0.5% international exposure likely comes from firms incorporated abroad but listed in the US, plus a modest cash position at 0.2%.

QQQ's composition tells a different story. While still heavily US-focused at 96%, it allocates nearly four times more to international stocks than VOO. This 3.6% non-US exposure reflects the NASDAQ-100's inclusion of companies like Alibaba and Baidu that are incorporated overseas but trade on US exchanges. The fund also holds slightly less cash at 0.07%, keeping more money working in the market. For investors, these differences mean QQQ offers marginally more geographic diversification, though both funds remain overwhelmingly tied to American companies.

Regional Allocation

Both VOO and QQQ keep almost everything at home: 99.5% of VOO’s holdings are North-American based, while QQQ clocks in at 97.6%. The tiny gap comes from QQQ’s extra 1.2% in developed Europe and 0.4% in emerging Asia footprints left by a handful of NASDAQ-100 constituents that book meaningful revenue abroad yet still trade on U.S. exchanges.

For practical purposes, either fund gives you a purely domestic story. If you’re trying to calibrate a broader international mix, you won’t need to adjust much for these positions; they’re rounding errors. Just remember that sector bets, not geography, are what really separate the two.

Sector Weights

QQQ's technology weighting jumps off the page at 51%, making it more of a tech fund than a diversified market play. That's 16 percentage points higher than VOO's already substantial 35% tech allocation, and the concentration gap widens when you notice QQQ's next two sectors - communication services at 16% and consumer cyclicals at 13% - are also tech-adjacent. Financial services barely registers in QQQ at 0.3%, essentially a rounding error compared to VOO's 13% weighting that mirrors the broader market.

The sector splits reveal two fundamentally different bets. VOO gives you the full economic picture - healthcare at nearly 10%, industrials at 7.5%, and energy at 2.8% - while QQQ's composition suggests a bet on digital transformation and consumer spending. Missing from QQQ are the traditional economy workhorses: utilities, real estate, and energy combine for just 2% of the fund. This concentration has worked recently (QQQ outperformed VOO by 3% last year), but investors should consider whether they want pure tech exposure or the economic breadth that comes with VOO's sector balance.

Top 10 Holdings

Both ETFs tilt heavily toward the same three tech giants, but QQQ leans harder. NVIDIA, Apple and Microsoft alone make up about 20.5% of QQQ's portfolio, versus 20.7% for VOO. The gap feels small until you notice QQQ's extra 1% weight in each name, a difference that adds up quickly when these stocks move.

Beyond the top three, QQQ keeps loading the tech boat while VOO diversifies. Amazon's weight is a full percentage point higher in QQQ (4.81% vs 3.84%), and QQQ's fifth slot goes to Tesla at 3.82% while VOO slips into steadier Alphabet A shares. For investors, this means QQQ's performance will swing more dramatically on any given day, while VOO's slightly broader spread offers a bit more cushion when tech stumbles.

Valuation & Growth Metrics

QQQ trades at a 12% premium to VOO on both earnings and book value, with a P/E of 25.1 versus 22.4 and a P/B of 6.4 against 4.6. That richer price tag is the market’s way of saying the Nasdaq-100’s growth profile justifies paying more for every dollar of current profit or net asset. The gap widens further on sales: QQQ’s price-to-revenue ratio sits at 5.0, 55% above VOO’s 3.2, reflecting the index’s heavy tilt toward asset-light software and internet names that convert revenue into cash more efficiently.

Looking backward, QQQ’s historical earnings growth of 15.8% handily beats the S&P 500’s 10.2%, yet the two ETFs nearly converge on forward-looking long-term growth estimates 10.8% for QQQ versus 10.5% for VOO. In short, you’re paying a higher entry fee for QQQ mainly for the comfort of its recent track record, not because analysts see a meaningfully faster earnings trajectory ahead. Investors comfortable with that premium are betting the past can repeat; those who balk at 25-times earnings might find VOO’s 22-times valuation the safer handshake.

Which ETF Fits Your Portfolio?

If you want broad market exposure with minimal costs, VOO delivers exactly that. The 0.03% expense ratio means you'll keep almost everything the S&P 500 earns, and the 1.13% dividend yield provides decent income alongside growth. It's the steady choice - technology still dominates at 35% of holdings, but you get meaningful exposure to financials, healthcare, and other sectors that won't all move in lockstep.

QQQ takes a different approach by betting heavily on tech's continued dominance. The 17.5% one-year return beat VOO's 14.43%, but that outperformance comes with a steeper 0.20% price tag and less diversification - over half the fund sits in technology stocks. The 0.46% yield won't impress income investors, though growth-focused investors might not care. Your choice really depends on whether you think the Nasdaq-100's tech concentration will keep winning or if you'd rather own the entire market at a lower cost.

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.