QQQ vs. VOO — ETF Comparison - Stock Analysis (2024)

FAQs

QQQ vs. VOO — ETF Comparison - Stock Analysis? ›

In the past year, QQQ returned a total of 27.91%, which is slightly higher than VOO's 27.75% return. Over the past 10 years, QQQ has had annualized average returns of 18.01% , compared to 13.00% for VOO. These numbers are adjusted for stock splits and include dividends.

QQQ and VOO Holdings Overlap

The VOO and QQQ portfolio contains matching assets. Of the 100 companies included in the Nasdaq-100, 78 are also included in the S&P 500. If we compare QQQ and VOO by the top 10 companies, 8 of them will match.

QQQ Performance. Invesco QQQ — the ETF that tracks the Nasdaq-100 index — has beaten the S&P 500 eight out of the last 10 years as of June 30, 2024. Source: Morningstar Inc. Data begins 10 years prior to the ending date.

The Vanguard S&P 500 ETF (VOO) is a good complement to VTI. VOO tracks the S&P 500 Index. This index includes the top 500 U.S.-based companies on the stock exchange.

QQQ vs SPY: Risk and Return

Over the past three, one, and year-to-date periods, QQQ has consistently outperformed SPY. This outperformance is not surprising, given the recent dominance of large-cap, growth stocks, and technology, which QQQ emphasizes.

VOO has only outperformed QQQ in three years by an average of 7%. Overall, when it comes to performance, QQQ has a clear advantage. But while VOO has an advantage over the last ten years, from 2021-2023, VOO outperformed in two out of three years by an average of 8%.

Looking back at 2022 when the growth-oriented Nasdaq-100 Index underperformed the market, the free cash flow yield segment performed well. QQQ and VFLO have tended to work in opposite directions. That potentially makes them a complementary pair, effectively creating what we believe is an all-weather portfolio.

The QQQ ETF offers investors big rewards during bull markets, with the potential for long-term growth, ready liquidity, and low fees. QQQ usually declines more in bear markets, has high sector risk, often appears overvalued, and holds no small-cap stocks.

While the two ETFs follow the same strategy, they earn different ratings. VOO earns a top rating of Gold, while SPY earns the next best rating of Silver. Almahasneh says the reason is fees and inefficiencies of the unit investment trust structure.

Does Warren Buffett invest in VOO? ›

He has also maintained a stake in the Vanguard S&P 500 ETF (NYSE:VOO), holding 43,000 shares valued at $18.78 million. "In my view, for most people, the best thing to do is own the S&P 500 index fund," Buffett had once said.

VOO is also a low-cost index fund. VOO invests in the 500 largest U.S. public companies. Like VTI, VOO is often used as a core holding—meaning investors will allocate a large percentage of their overall portfolio to this fund. Let's review the strategy and key features that make VOO so popular.

Vanguard S&P 500 ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, VOO is a great option for investors seeking exposure to the Style Box - Large Cap Blend segment of the market.

QQQ is better to buy for investments of a year or more. The NASDAQ-100 index dynamics are more volatile compared to the S&P 500. With a shorter investment horizon, there's a high risk of a decrease in value.

XLK has outperformed QQQ on a three-year basis, with a three-year annualized return of 13.4%. It has also beaten QQQ over the past five years, with an annualized return of 19.6%. Even over the past 10 years, it edges QQQ out with an excellent 20.5% annualized return.

For long-term buy-and-hold investors, the QQQ is a good choice to get broad exposure to the Nasdaq-100 Index. This may be used in conjunction with other index ETFs to create a well-diversified portfolio for the long run.

The Invesco QQQ ETF is an exchange-traded fund (ETF) that tracks the Nasdaq 100 Index. Because it passively follows the index, the QQQ share price goes up and down along with the tech-heavy Nasdaq 100. Passive management keeps fees low, and investors are rewarded with the full gains of the volatile index if it rises.

Invesco QQQ ETF (QQQ) is an exchange-traded fund that tracks the Nasdaq-100 Index™. The index includes the 100 largest non-financial companies listed on the Nasdaq, based on market cap. You can access the performance of these 100 companies with an investment in QQQ.

Investors often wonder how much overlap is acceptable. While there is no universal threshold, a common guideline suggests keeping overlap between ETFs below 50 percent. In essence, if two ETFs share more than 50 percent of their holdings, it is deemed high overlap, which diminishes diversification benefits.

The S&P500 and the NASDAQ are both indices of stocks and there's a lot of overlap between the 2. Many of the top 10 stocks are the same, so if you're invested in both, you may not be as diversified as you think.