VOO vs. SPY: Which S&P 500 ETF is The Better Bet?
Subtle differences in structure and yield set these two S&P 500 giants apart for investors seeking long-term growth or trading flexibility.
VOO vs. SPY: Which S&P 500 ETF is The Better Bet?
Overview
Comparing Vanguard S&P 500 ETF (NYSEMKT:VOO) to State Street SPDR S&P 500 ETF Trust (NYSEMKT:SPY) reveals two nearly identical portfolios where the primary distinctions are expense ratios and fund management structures.
Both funds serve as foundational building blocks for long-term investors by tracking the S&P 500 Index, which covers approximately 80% of U.S. market capitalization. While they hold the same basket of large-cap American companies, their costs and historical liquidity profiles differ slightly, making the Vanguard fund potentially more attractive for long-term buy-and-hold strategies, whereas the State Street trust remains a primary vehicle for high-volume institutional traders.
Details
The Vanguard fund is more affordable for retail investors with an expense ratio of 0.03%, compared to 0.09% for the SPDR trust. While this 0.06 percentage point gap may seem negligible in the short term, it can compound over decades for investors with significant capital.
Source
Originally published at www.fool.com.
