VOO vs. QQQ: Which Index Fund Is the Better Buy for Long-Term Investors?
QQQ delivered better returns over the past five years, but also suffered a higher maximum drawdown. VOO offers lower fees and a higher dividend for more conservative investors.
Overview
The Vanguard S&P 500 ETF (NYSEMKT:VOO) provides broad market exposure at a minimal cost, while the Invesco QQQ Trust (NASDAQ:QQQ) offers significantly higher technology exposure that comes with greater historical volatility.
Choosing between these two heavyweights means comparing the aggressive, high-growth trajectory of the tech-heavy Nasdaq-100 to the diversified stability of the S&P 500. While both funds are cornerstones of modern equity portfolios, they differ significantly in sector concentration, fees, and historical volatility. This analysis looks at how these two funds stack up for long-term investors seeking the right balance of risk and reward.
Details
Beta measures price volatility relative to the S&P 500; beta is calculated from five-year monthly returns. The 1-year return represents total return over the trailing 12 months. Dividend yield is the trailing-12-month distribution yield.
Source
Originally published at www.fool.com.