Vanguard S&P 500 ETF charges a much lower expense ratio and offers a higher dividend yield than Invesco QQQ Trust, Series 1
QQQ has delivered stronger one year total return but with a higher maximum drawdown and more technology concentration
VOO holds a broader slice of the U.S. market and shows lower volatility and risk metrics over the past five years
Vanguard S&P 500 ETF (NYSEARCA:VOO) and Invesco QQQ Trust, Series 1 (NASDAQ:QQQ) differ notably in cost, yield, diversification, and risk profile, with QQQ leaning heavily into technology and VOO providing broader exposure at a much lower fee.
Both funds are popular choices for U.S. equity exposure, but their approaches diverge: QQQ tracks the tech-focused NASDAQ-100, while VOO mirrors the broader S&P 500 Index. This comparison looks at cost, performance, risk, and portfolio makeup to help investors weigh which may better fit their needs.
| Metric | QQQ | VOO |
|---|---|---|
| Issuer | Invesco | Vanguard |
| Expense ratio | 0.18% | 0.03% |
| 1-yr return (as of 2026-04-06) | 39.6% | 32.2% |
| Dividend yield | 0.49% | 1.19% |
| Beta | 1.11 | 1.00 |
| AUM | $372.51 billion | $1.42 trillion |
Beta measures price volatility relative to the S&P 500; beta is calculated from five year monthly returns. The one year return represents total return over the trailing twelve months.
VOO looks far more affordable, charging just 0.03% annually compared to QQQ’s 0.18%, and it also pays out a higher dividend yield at 1.2% versus 0.5% for QQQ. These cost and income differences could appeal to fee- and income-conscious investors.
| Metric | QQQ | VOO |
|---|---|---|
| Max drawdown (five years) | -35.12% | -24.52% |
| Growth of $1,000 over five years | $1,829 | $1,740 |
VOO tracks roughly 505 of the largest U.S. companies, aiming to mirror the S&P 500 Index. Its portfolio allocates 33% to technology, but also includes sizable allocations to financial services (12%) and communication services (11%). Top holdings include NVIDIA Corp (NASDAQ:NVDA), Apple Inc (NASDAQ:AAPL), and Microsoft Corp (NASDAQ:MSFT), but each forms a smaller slice than in more concentrated funds, and the broader sector spread helps diversify risk.
In contrast, QQQ is more concentrated, comprising 102 holdings and exhibiting a significant allocation to the technology sector at 50%, along with communication services (16%) and consumer cyclical stocks (13%). Its largest positions—NVIDIA Corp (NASDAQ:NVDA), Apple Inc (NASDAQ:AAPL), and Microsoft Corp (NASDAQ:MSFT)—make up a larger share of assets, resulting in a more growth-oriented, tech-heavy profile.
For more guidance on ETF investing, check out the full guide at this link.
The Vanguard S&P 500 ETF and the Invesco QQQ Trust are two of the most widely used U.S. equity ETFs, and they are often treated as comparable core holdings because they share many of the same large-cap names. In practice, they represent very different types of exposure. VOO tracks the S&P 500 and reflects the broad large-cap U.S. market, while QQQ follows the Nasdaq-100 and is more heavily weighted toward growth-oriented sectors and companies.
VOO holds companies across the major sectors of the U.S. economy, including financials, healthcare, industrials, and technology, which gives it exposure to a broader set of earnings drivers. In contrast, QQQ is concentrated in mega-cap technology and growth stocks, excluding financials entirely. Its performance relies heavily on a small group of holdings, making returns more dependent on the ongoing success of those companies and favorable growth conditions.
For investors, the real decision is whether they want broad, large-cap market exposure or a more concentrated allocation to growth leadership. VOO provides a lower-cost way to track the overall direction of large U.S. companies. QQQ offers a narrower, more top-heavy exposure, with results tied more closely to a handful of dominant companies and the valuation environment around them.
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Eric Trie has positions in Nvidia. The Motley Fool has positions in and recommends Apple, Microsoft, Nvidia, and Vanguard S&P 500 ETF and is short shares of Apple. The Motley Fool has a disclosure policy.
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