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VOO vs SPY: Which S&P 500 ETF Should You Buy in 2026?
Bottom line
VOO is the better long-term hold. SPY is the better active-trader tool.
The 10 universal facts
VOO Vanguard S&P 500 ETF
vs
SPY SPDR S&P 500 ETF Trust
0.03%
Expense ratio
0.0945%
$3
Annual cost / $10k
$9.45
$1.51T
AUM
$633B
Sep 7, 2010
Inception
Jan 22, 1993
518
Holdings
503
~13.1%
10y CAGR (total return)
~13.0%
~1.2%
Dividend yield
~1.2%
Quarterly
Dividend frequency
Quarterly
Open-end ETF
Structure
Unit Investment Trust
Vanguard
Issuer
State Street (SSGA)
Performance & backtest
Investing $10,000 from Sep 2010 How this is calculated Dividends reinvested every month. Monthly adjusted-close prices from Yahoo Finance. Past performance doesn't predict future returns.
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Final portfolio value
- Invested
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- Growth
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- Total return
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- Per year
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What's specific to VOO vs SPY
Trading liquidity
SPY trades ~6x more
SPY has the deepest options market of any U.S. ETF. Matters for traders; doesn't for buy-and-hold.
30-year fee impact
VOO saves ~$3,020 per $10k
Compounding the 0.0645 percentage-point fee gap on a $10,000 buy over 30 years at 10% returns. Small per year, real over a working lifetime.
Why the fee gap exists
SPY is frozen as a UIT
SPY's 1993 unit-investment-trust structure prevents dividend reinvestment and securities lending. VOO can do both, which adds a few basis points of return per year.
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Frequently asked questions
Is VOO better than SPY?
For most long-term investors, yes. VOO charges 0.03% annually vs SPY's 0.0945%, and its open-end structure allows dividend reinvestment and securities lending. SPY is the better choice for active traders and options strategies where liquidity matters more than fees.
Why is SPY more expensive than VOO?
SPY was launched in 1993 as a unit investment trust (UIT). UIT rules impose higher operating costs and prevent SPY from reinvesting dividends or lending securities. State Street has been unable to convert SPY to a cheaper structure due to legal and contractual constraints.
Do VOO and SPY hold the same stocks?
Yes. Both track the S&P 500 Index and hold essentially the same stocks in the same proportions. Minor differences in holdings count (VOO lists 518, SPY lists 503) come from how each fund counts dual-class shares.
Should I switch from SPY to VOO?
In a tax-advantaged account like a Roth IRA, switching is straightforward. In a taxable account, selling SPY could trigger capital gains taxes that outweigh years of fee savings. For new money, VOO is generally the better choice.
Can I hold both VOO and SPY?
You can, but there's no benefit. They hold the same stocks. Owning both is redundant; you'd be paying a blended expense ratio higher than necessary. Pick one.