VOO vs SPY: Side-by-Side ETF Comparison

VOO vs SPY: Both track the S&P 500 with near-identical performance (14.43% vs 14.36% 1-year returns), but VOO costs 70% less at 0.03% expense ratio compared to SPY's 0.10%. The choice comes down to cost - VOO saves you $7 annually per $10,000 invested while delivering the same market exposure.

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

Both VOO and SPY chase the same 500 U.S. stocks, yet they arrive from opposite corners of the industry ring. Vanguard’s VOO is the in-house product of the mutual-owned giant, so the 0.03% expense ratio is effectively a pass-through cost; every dollar saved drops straight to the investor’s side of the ledger. SPY comes from State Street’s SPDR franchise, the first-mover ETF that still trades like a seasoned liquidity workhorse, but the older trust structure keeps the fee at 0.10%. Three basis points versus ten sounds trivial until a seven-figure position turns it into real money.

Under the hood the portfolios are almost photocopies: tech commands 35% of VOO and 34% of SPY, while the next two sectors land within 0.3% of each other, so the one-year return gap was only seven-hundredths of a percent (14.43% vs 14.36%). The real choice is whether you value every last basis point of cost savings or the tightest bid-ask spread on the planet; Vanguard wins the fee battle, SPY wins the volume battle, and the S&P 500 doesn’t care which ticket you ride.

Annual & Cumulative Returns

The performance gap between VOO and SPY is razor-thin, but it's remarkably consistent. VOO edges out SPY by 0.07 percentage points annually over the past year, and this advantage holds across every time period we measured. The difference compounds over time - that extra 0.06% annually becomes 0.8% over a decade on a $10,000 investment. Not life-changing money, but it's real.

What drives this slight outperformance isn't stock selection - both funds own identical S&P 500 companies. The culprit is fees. VOO's 0.03% expense ratio saves investors 0.07% annually compared to SPY's 0.10% fee. In a world where most active managers struggle to beat their benchmarks by 1%, earning an extra 0.07% through lower costs is practically free money. For buy-and-hold investors, VOO's fee advantage makes it the mathematically superior choice, even if the difference feels trivial in any given year.

Risk Metrics

The risk numbers tell a familiar story for two funds tracking the same index. VOO and SPY move almost in lockstep, with one-year volatility separated by just one basis point (10.99% vs 10.98%) and three-year figures showing the same pattern. Their Sharpe ratios sit nearly identical at 1.4 and 1.39, meaning investors get the same risk-adjusted returns whether they pay Vanguard's 0.03% fee or State Street's 0.10%.

This isn't surprising given both funds hold the same 500 stocks in similar weights. The tiny differences likely come from sampling methods, cash drag, or timing of rebalancing - nothing that moves the needle for portfolio risk. What matters more is that 11-12% volatility range, which reflects the market's recent calm period and might not hold when turbulence returns.

Dividend Yield & Growth

VOO edges out SPY by six basis points on trailing yield, 1.13 % versus 1.07 %. That gap is roughly what you’d expect from the funds’ expense ratios: VOO’s 0.03 % fee leaves more of the underlying S&P 500 cash on the table, while SPY’s 0.10 % levy takes a slightly bigger bite. On a $100 k holding the difference pencils out to about $60 a year in extra dividends nice pocket change, but not enough to drive the purchase decision by itself.

Payment timing is where the two diverge more noticeably. SPY follows a textbook quarterly schedule, dropping cash every third month and making budgeting easy for retirees or anyone running a regular withdrawal plan. VOO’s Vanguard pedigree means dividends also arrive quarterly in practice, yet the fund technically declares and distributes on its own timetable, so the calendar can shift a few weeks. Unless you’re managing tight cash-flow needs, either rhythm works; just know that SPY’s cadence is the more predictable one.

Fees & Liquidity

VOO's 0.03% expense ratio means you'll pay just 30 cents annually on every $1,000 invested. SPY costs more than three times that at 0.095%, which works out to 95 cents per thousand. The gap sounds tiny until you scale up - on a $100,000 position, you're looking at $30 versus $95 each year. Compounded over decades, that $65 annual difference starts to matter.

Trading costs tell a different story. SPY's been around since 1993 and trades more shares daily than any other ETF, which typically translates to tighter bid-ask spreads. VOO trades plenty too, but SPY's liquidity advantage means you're more likely to get your fill at the quoted price, especially on larger orders. For buy-and-hold investors who might make one purchase and hold for years, VOO's lower fee usually wins. Active traders or those dollar-cost averaging small amounts might find SPY's liquidity offsets the slightly higher expense ratio.

ETF Composition: Asset Classes

Both VOO and SPY are essentially all-in on U.S. large-caps: each parks just a hair under 99.1% of assets in American equities. What little escapes the S&P 500 is split between foreign listings (about 0.53% for both funds) and a cash drag that sits in the low double-digit basis points. The difference is that SPY’s cash bucket is roughly 60% larger 0.34% versus 0.22% which explains why its expense ratio is triple VOO’s yet its dividend yield is slightly lower. That extra cash buffer is a by-product of SPY’s unit-creation process, not a tactical bet, but it does mean a sliver of your money is earning money-market rates instead of the market’s 22-times earnings.

For buy-and-hold investors the gap is microscopic: on a $100k position we’re talking $120 more in idle cash with SPY, costing maybe two basis points of return a year. Traders who rotate frequently or hold in taxable accounts might prefer VOO’s leaner cash slice, while those using options or needing the deepest liquidity may gladly pay SPY’s tiny “cash tax” in exchange for tighter bid-ask spreads.

Regional Allocation

Both VOO and SPY keep almost every dollar inside the United States. North America accounts for 99.47% of VOO’s holdings and 99.47% of SPY’s so close the rounding difference is two-hundredths of a percent. What little is left drifts almost entirely to large-cap multinationals headquartered in London or continental Europe, plus a sliver of emerging Asia exposure that shows up because a handful of S&P 500 constituents list shares abroad. In other words, you’re buying the same domestic profit stream either way.

For investors who view geographic diversification as a risk reducer, neither fund helps much; you’d need to pair either one with international or emerging-market ETFs to broaden the map. If your main worry is currency swings, the tiny 0.53% overseas weight in both portfolios is too small to move the needle. Simply pick the cheaper ticker or the one that fits your brokerage’s commission schedule and move on the regional split won’t be the deciding factor.

Sector Weights

Both funds track the same S&P 500 index, so their sector footprints are nearly identical, yet the tiny tracking differences show up in the weights. VOO carries a hair more tech exposure at 35.1% versus SPY’s 34.2%, while SPY tilts a touch toward energy (3.05% vs 2.82%) and industrials (7.96% vs 7.50%). Those gaps are measured in tenths of a percent, but on a $100k position that’s still a few hundred dollars extra parked in semiconductors or oil majors depending on which ticker you hold.

What this means in practice is that neither portfolio will steer you away from the market’s heavy tech lean, and both will rise or fall with the same handful of Apple-Microsoft-Nvidia names. The choice really comes down to whether you want the microscopic bump in tech concentration that VOO’s sampling method produces, or the slightly broader spread that SPY’s full replication delivers. Over decades the variance is noise, but if you’re already overweight tech elsewhere, the 0.9-percentage-point difference could nudge you toward SPY for balance.

Top 10 Holdings

The top holdings paint a familiar picture for anyone tracking the S&P 500. Both ETFs lean heavily on the same tech giants, with NVIDIA claiming the top spot at 7.75% in VOO and 7.59% in SPY. The weighting differences are minor but real - VOO gives Apple a 0.67% larger allocation than SPY does, while SPY tilts slightly more toward Alphabet's Class A shares. These aren't rounding errors when you're talking about positions worth hundreds of billions.

What stands out is how concentrated these supposedly diversified funds have become. Just five companies make up roughly 27% of each fund, meaning over a quarter of your investment rides on the fortunes of mega-cap tech stocks. That's great when these stocks rally, but it leaves investors exposed if the tech sector stumbles. The similarity between VOO and SPY here isn't surprising - they're both tracking the same index after all - but it does mean you won't find much differentiation at the top regardless of which fund you choose.

Valuation & Growth Metrics

VOO trades at 22.44 times earnings while SPY sits a hair lower at 22.28, a gap of less than one percent that barely moves the needle. The same tight spread shows up on price-to-book 4.59 versus 4.51 and price-to-sales, where both funds hover just above 3.1. In plain terms, you're buying the same market basket at essentially the same sticker price.

Growth expectations are equally matched: long-term earnings growth is 10.5% for VOO and a rounding-error difference of 10.49% for SPY, while trailing sales growth is 7.98% vs 7.99%. These microscopic differences simply reflect the fact that both funds track the same 500 companies with slightly different sampling techniques. For investors, the choice between them won't hinge on valuation or growth outlook it will come down to whether the seven-basis-point expense gap matters more than SPY's tighter bid-ask spread and longer track record.

Which ETF Fits Your Portfolio?

VOO charges 0.03% a year, SPY 0.10%. That seven-basis-point gap sounds trivial, but on a $100,000 holding it’s $70 saved annually with Vanguard money that stays in your pocket and compounds quietly. The two funds own the same 500 companies in almost identical weights, so the return patterns are nearly twins: VOO edged ahead by 0.07 percentage points over the past year, while the dividend yield sits within six basis points (1.13% vs 1.07%). In other words, the market risk is the same; the only reliable difference is cost.

Pick VOO if you’re building a long-term core position and want every fee nickel to work for you. Use SPY if you need the tightest options market or the most liquid intraday trades; its volume makes it the favorite for short-term hedgers and traders. Buy either one and you own the S&P 500 just decide whether you care more about shaving expenses or about maximizing flexibility.

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.