You do have to look really closely to see the blue line peak out from under the red one in the latest drawdown in 2020. Over an entire lifetime or career and depending on the initial investment, this can potentially be even more than an extra few thousand dollars for retirement. In my previous article, I implemented a Monte Carlo simulation on a dollar-cost averaging strategy in Python. mrmarvinallen.com is not a registered investment or financial advisor. Overall, VOO performs better. This leads to VOO seeing a greater percent increase year over year for an overwhelming majority of the time. As a result, no small-cap companies are included in this ETF. However, in comparison to all other ETFs out there both VOO and SPY fare very well. Save my name, email, and website in this browser for the next time I comment. Make learning your daily ritual. Large-cap companies such as Apple, Amazon, Google and Facebook now make up a disproportionate percentage of the total market. SPY and VOO are very similar investments. Healthcare and financial services come in at a distance rank two and three. No surprise here since they essentially hold the same stocks. Here is the average annual performance for the two ETFs as of December 31st, 2019: VOO: VTI: 1 Year: 31.46%: 30.8%: 3 Years: 15.23%: 14.56%: 5 Years: 11.66%: 11.21%: 10 Years: 13.56%* 13.43% *Note: 10-year performance for VOO is estimated …

For the 1-year time span, the central tendency for SPY relative percent change shifted a little towards the negative side around -0.1%. In fact, SPY’s expense ratio is more than three times that of VOO as their precise annual fees amount to 0.0945%.eval(ez_write_tag([[250,250],'mrmarvinallen_com-medrectangle-4','ezslot_10',108,'0','0'])); VOO is issued by one of my favorites: Vanguard. VOO vs SPY. Close to 90% of the VOO’s market cap is made up of large-cap companies. The SPDR S&P 500 ETF Trust (SPY) tracks the exact same index, the S&P 500. We can look at the day-to-day changes in percentages to analyze how the daily stock price fluctuations behaved. Using a simple percent change calculation, we can get a distribution of change between the two funds relative to SPY. The S&P 500 is the benchmark index by which many investors compare their returns. The only requirement is to the need to purchase at least one full-share. There are only a few 5-year periods in the historical data where SPY beats VOO, and even those were barely greater than 0% difference.

Hands-on real-world examples, research, tutorials, and cutting-edge techniques delivered Monday to Thursday. VIGAX vs VTSAX: Which Admiral Fund Is Better. This is simply due to the fact that VOO holds 4 more mid-cap stocks than SPY (509 vs. 505) but has no significant effect on the funds’ total holdings. Together these five companies out of 500 make up nearly 20% of the fund’s total assets. Over a period of 9 years with a portfolio of $10,000 they added up to $132. The primary difference between Vanguard’s S&P 500 ETF (VOO) and SPDR S&P 500 ETF Trust (SPY) is the expense ratio of the two funds.

Technicals Database Analyst Take Realtime Ratings Overview. Range and standard deviation also increase as duration increases. The only major difference was in the expense ratios (the cost of owning the fund), where VOO costs 0.03%, while SPY is 0.09%. I would choose VOO because the expense ratio is lower compared to SPY.

Does it matter which one I buy? When we compare the statistics between 1-day, 1-year, and 5-year periods, the average percent change between SPY and VOO increases in order of magnitude as investment duration increases. There are some advantages and disadvantages to both because they differ in the expense ratio and brokerage. After keeping fees to a minimum, you can work on increasing your savings rate and. However, extending an investing period to 1 year and even 5 years amplify minor differences into more substantial ones.

The reason SPY is so popular is that over the long term the S&P 500 has a strong track record of going up. The main takeaway here is that both funds are essentially the same in terms of their composition.

SPDR S&P 500 ETF (SPY) SPY was one of the first ETFs, having been founded in 1993. SPDR S&P 500 ETF Trust (SPY) is largely made up of Microsoft, Apple, Amazon, Facebook, and Berkshire Hathaway. I am on a path toward financial freedom. I chose to invest in VOO instead of SPY because of this lower expense ratio. Get All My Free Resources For Financial Independence!

Some important comparison metrics here are … This is reflected in the compound annual growth rate (CAGR): where VOO achieves a growth rate of 11.65%, SPY falls a little short at 11.60%.eval(ez_write_tag([[468,60],'mrmarvinallen_com-box-3','ezslot_13',106,'0','0'])); Let’s look at this comparison in a bit more detail! SPY vs. VTI: Head-To-Head ETF Comparison The table below compares many ETF metrics between SPY and VTI.

Seems like VOO gets slightly better over time. Even though the average 5-year percent change between SPY and VOO is only 0.72%, it can be a significant amount of money in practicality. It got me thinking whether there was any discernable difference between the two funds. VOO is also commission-free if purchased through Vanguard, which is the brokerage I prefer to use. However, if we look closely, we can see VOO come out ahead just very slightly in some years such as 2014, 2017 and 2019. Share This With The People You Care About! When I took the difference between both share prices for each day, we see that there is an increase in the difference over time. This is how their performance compares over the last 10 years: Vanguard’s S&P 500 ETF (VOO) is the ETF equivalent of Vanguard’s 500 Index Fund Admiral Shares (VFIAX). VOO holds 509 stocks and SPY holds 505.

Both SPY and VOO can get you to Financial Independence/Retire Early (FIRE). On the other hand, in that same time, we can see the valuation of both stocks have tripled. Day-to-day changes between the stocks are nearly identical. Many index investors use the S&P 500 ... (SPY, VOO, and IVV), and see which one is right for you. Lastly, I extended the duration to the maximum given by the dataset from 9/9/2010 to the current date and found that SPY increased 234.1% while VOO increased 236.5%, resulting in a 2.4% difference over 10 years. Even though both funds track the same index there is a significant difference in the assets they have under management. SPY, on the other hand, has an expense ratio 0.09%. An investment of $100,000 of SPY would be $100,720 in VOO. Another option to start investing as soon as possible into VOO is to start with its investor share funds. Both ETFs have similar goals and track the S&P500 Index. Vanguard also has some of the lowest fees and best index funds available overall. We will do a side by side comparison of the Invesco QQQ ETF and the Vanguard S&P 500 ETF. When I first looked at the time-series for the two funds (SPY and VOO), I saw that the curves were nearly identical with a slight share price offset. One minor difference we see here is that VOO is made up of 0.1% more mid-cap companies.This is simply due to the fact that VOO holds 4 more mid-cap stocks than SPY (509 vs. 505) but has no significant effect on the funds’ total holdings. Below is the comparison between VOO and SPY. Range and standard deviation also increase as duration increases.

The primary difference between Vanguard’s S&P 500 ETF (VOO) and SPDR S&P 500 ETF Trust (SPY) is the expense ratio of the two funds.