SPY vs VOO: Complete 2025 Comparison Guide
SPY and VOO both track the S&P 500. Compare expense ratios, tax efficiency, trading volume, and performance to find which ETF is right for your portfolio.
Quick Summary
SPY and VOO have 99.8% overlap - virtually identical holdings. VOO has lower expense ratio (0.03% vs 0.09%) saving $60 per year on $100K invested. SPY has higher trading volume, better for day traders and options. VOO is more tax efficient for taxable accounts. Both are excellent - choice depends on your use case.
Compare SPY vs VOO with live overlap data at /spy-vs-voo
What Are SPY and VOO?
Both SPY (SPDR S&P 500 ETF Trust) and VOO (Vanguard S&P 500 ETF) track the S&P 500 Index - the 500 largest US companies.
SPY - SPDR S&P 500 ETF Trust
- Launched: January 1993
- Issuer: State Street Global Advisors
- Assets: Over $500 billion
- Expense Ratio: 0.09%
- First ETF ever created
VOO - Vanguard S&P 500 ETF
- Launched: September 2010
- Issuer: Vanguard
- Assets: Over $400 billion
- Expense Ratio: 0.03%
- Vanguard's low-cost alternative
Key Differences
| Feature | SPY | VOO | Winner |
|---|---|---|---|
| Expense Ratio | 0.09% | 0.03% | VOO |
| Trading Volume | 80M+ shares/day | 5M+ shares/day | SPY |
| Options Market | Highly liquid | Less liquid | SPY |
| Tax Efficiency | Standard | Superior | VOO |
| Bid-Ask Spread | $0.01 | $0.02 | SPY |
| Dividend Yield | 1.3% | 1.3% | Tie |
| Returns | Identical | Identical | Tie |
VOO wins on cost. SPY wins on liquidity. Performance is identical.
Expense Ratio Impact
The expense ratio is your annual fee to own the ETF.
Cost on $100,000 investment:
| Time Period | SPY Cost | VOO Cost | Your Savings |
|---|---|---|---|
| One Year | $90 | $30 | $60 |
| Five Years | $450 | $150 | $300 |
| Ten Years | $900 | $300 | $600 |
| Twenty Years | $1,800 | $600 | $1,200 |
| Thirty Years | $2,700 | $900 | $1,800 |
Over 30 years, VOO saves $1,800 per $100K invested.
Why the difference? SPY was created in 1993 when ETF fees were higher. VOO launched in 2010 with Vanguard's low-cost approach. SPY maintains higher fees due to its liquidity premium.
Use the expense calculator at /expense-calculator
Holdings Overlap
SPY and VOO have 99.8% overlap - virtually identical holdings.
Top 10 Holdings (Both ETFs):
| Company | Ticker | Weight |
|---|---|---|
| Apple | AAPL | 7% |
| Microsoft | MSFT | 7% |
| Amazon | AMZN | 4% |
| NVIDIA | NVDA | 3% |
| Alphabet A | GOOGL | 2% |
| Meta | META | 2% |
| Alphabet C | GOOG | 2% |
| Berkshire | BRK.B | 2% |
| Tesla | TSLA | 2% |
| Eli Lilly | LLY | 1% |
The 0.2% difference comes from:
- Timing of rebalancing
- Small cash holdings
- Securities lending
Practical impact: None. The difference is negligible.
See live overlap analysis at /spy-vs-voo
Performance Comparison
Historical Returns (December 2025):
| Period | SPY | VOO | Difference |
|---|---|---|---|
| YTD | +28.4% | +28.4% | 0.0% |
| One Year | +29.2% | +29.2% | 0.0% |
| Three Years | +12.7% | +12.7% | 0.0% |
| Five Years | +15.1% | +15.2% | +0.1% VOO |
VOO slightly outperforms due to lower fees - exactly as expected.
Why nearly identical? Both track the same index, hold the same stocks (99.8% overlap), and use market-cap weighting. The only difference is fees.
Long-term projection: $10,000 invested for 30 years at 10% annual return before fees:
- SPY (0.09% fee): $164,528
- VOO (0.03% fee): $166,352
- Difference: $1,824 extra with VOO
Trading Volume and Liquidity
Daily trading volume:
- SPY: 80-100 million shares
- VOO: 5-8 million shares
SPY is 15x more liquid.
When liquidity matters:
- Day trading or swing trading
- Large positions over $500K
- Trading options
- Quick exits in volatile markets
When liquidity doesn't matter:
- Buy and hold investing
- Small positions under $10K
- Using limit orders
- Infrequent trading
Bid-ask spread:
- SPY: $0.01
- VOO: $0.02
On a $500 share, that's 0.002% vs 0.004% - negligible for most investors.
Options trading: SPY dominates. Most liquid options market globally. VOO options have lower volume and wider spreads.
For options traders, choose SPY.
Tax Efficiency
VOO has superior tax efficiency thanks to Vanguard's ETF structure.
Capital gains distributions:
| Year | SPY | VOO |
|---|---|---|
| 2020 | $0.57 | $0.00 |
| 2021 | $0.41 | $0.00 |
| 2022 | $0.30 | $0.00 |
| 2023 | $0.38 | $0.00 |
| 2024 | $0.42 | $0.00 |
VOO has distributed zero capital gains in recent years.
Impact in taxable accounts: On $100,000 with $500 capital gains distribution:
- Federal tax (24% bracket): $120
- State tax (6%): $30
- Total tax bill: $150
You pay taxes on gains you didn't realize with SPY.
In tax-advantaged accounts (IRA, 401k, Roth): Capital gains don't matter. No tax bill either way.
Verdict:
- Taxable account: VOO wins
- IRA/401k/Roth: Doesn't matter
Which Should You Choose?
Choose VOO if:
- You're a buy-and-hold investor
- You invest in a taxable account
- You want the lowest cost
- You don't trade options
- You follow Bogleheads philosophy
Best for: Long-term investors, Roth IRA, taxable accounts
Choose SPY if:
- You trade actively
- You trade options
- You need maximum liquidity
- You want tighter spreads
- Your 401k offers SPY but not VOO
Best for: Active traders, options traders, institutions
Holding Both?
No. With 99.8% overlap, holding both is redundant. You get zero diversification benefit, pay two sets of fees, and complicate taxes.
Pick one.
Common Questions
Can I hold both SPY and VOO?
You can, but with 99.8% overlap, you're duplicating holdings and paying two sets of fees. Pick one.
Should I sell SPY and buy VOO?
In taxable accounts, consider tax implications. If you have large unrealized gains, selling triggers capital gains tax. Calculate if annual savings (0.06% + capital gains avoidance) exceed the one-time tax hit. In IRAs/401ks, switch tax-free.
Rule of thumb: Small gains (under 10%), switching makes sense. Large gains (over 30%), tax hit may not be worth it.
Why is SPY more expensive?
SPY launched in 1993 with higher fees. VOO launched in 2010 with modern low-cost structure. SPY maintains fees due to liquidity premium.
Do they pay the same dividends?
Nearly identical (1.3-1.4% yield). Both track S&P 500.
Which for options?
SPY. Most liquid options market globally.
I'm 25 saving for retirement. Which one?
VOO. You have 40+ years to compound - the 0.06% fee difference saves thousands. Tax efficiency is a bonus.
I'm 60 and trade actively. Which one?
SPY. Liquidity matters for active trading. You won't hold long enough for fee difference to matter much.
Does bid-ask spread matter?
Only for frequent traders. For buy-and-hold, VOO's 2-penny spread vs SPY's 1-penny is negligible (0.002% difference).
Conclusion
For 95% of investors, VOO is the better choice.
Lower expense ratio (0.03% vs 0.09%), better tax efficiency (zero capital gains), identical performance, and sufficient liquidity.
SPY is better only if you: Trade options, day trade actively, or need extreme liquidity.
The math: VOO saves 0.06% annually, avoids capital gains taxes, and performs identically. Over decades, that's thousands of dollars in extra wealth.
Compare SPY vs VOO with live data at /spy-vs-voo
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