Generated August 15, 2026.
Figures quoted in this analysis are from its generation date and may lag the live snapshot table above, which always shows the latest data.
Overview
SPY and VOO are both ETFs that track the S&P 500 Index, holding the same 500 large-cap U.S. stocks with identical weightings. The key distinction is their cost structure: VOO charges 0.03% annually while SPY charges 0.10%, a sevenfold difference in expense ratio that compounds over decades. VOO is also the larger fund by AUM at $1032B versus SPY's $812B.
How they differ
The headline difference is fees. VOO's 0.03% expense ratio undercuts SPY's 0.10% by 7 basis points per year. Over a 30-year holding period, that gap compounds to meaningful outperformance for VOO, assuming identical index returns. SPY is older (inception January 1993 vs. September 2010) and has $812B in assets; VOO has grown to $1032B despite launching 17 years later, reflecting the cost advantage. Both distribute quarterly and carry identical S&P 500 exposure with beta of 1.0. SPY shows a 0.98% distribution rate while VOO's is 1.10%—a small difference likely driven by rounding or minor timing variations in dividend capture, not structural factors.
Who each is best for
SPY: Fits investors who value the longest track record and established liquidity from the original S&P 500 ETF, or who may hold the fund in accounts where SPY's slightly lower price per share reduces barriers to fractional ownership.
VOO: Designed for cost-conscious buy-and-hold investors prioritizing the lowest expense ratio, particularly those with multi-decade time horizons where the 7 basis-point fee advantage compounds into material outperformance.
Key risks to know
- Index concentration and sector weight. Both funds hold 500 names but are heavily weighted toward the largest stocks and technology sector. A prolonged large-cap or sector rotation would affect both identically and substantially.
- Tracking error from fee drag. SPY's 0.10% expense ratio will systematically lag the S&P 500 Index by approximately that amount annually, while VOO's 0.03% ratio creates a smaller but measurable headwind. Over 20+ years, SPY's higher cost translates to measurable underperformance relative to VOO.
- Potential AUM-driven trading costs for SPY. Both funds are highly liquid, but SPY's role as the original and widely-held S&P 500 vehicle may occasionally incur higher trading costs during large inflows or outflows, though this effect is typically minor for most retail investors.
- U.S. equity market risk. Both funds are fully exposed to broad U.S. large-cap volatility. A significant market downturn affects SPY and VOO identically.
Bottom line
If cost is your primary lever over a long holding period, VOO's 0.03% expense ratio creates a meaningful structural advantage over SPY's 0.10%. If you value the longest historical record and established brand presence, SPY offers that legacy. Both track the same index with equivalent market risk and distribution frequency, so the choice hinges on whether the 7 basis-point fee difference matters to your time horizon and account size. Past performance does not predict future results.
AI-generated analysis for educational purposes only. Verify important details independently; past performance does not guarantee future results.
