SPY vs VOO: The S&P 500 Cost Gap That Compounds Over Decades
SPY and VOO both track the S&P 500, but SPY charges 0.0945% vs VOO's 0.03% — a 3x cost difference. SPY was the first ETF ever launched (1993) and remains the single most traded security in the world. Its unmatched liquidity makes it the default for options traders and institutions. For buy-and-hold investors, however, VOO's lower TER saves meaningful money over long horizons.
Key Differences
- TER: SPY 0.0945% vs VOO 0.03% — on $100K over 30 years, the difference compounds to ~$5,000+
- SPY is the most liquid ETF in the world: $30B+ daily volume, tightest options spreads
- VOO uses Vanguard's unique patent structure that historically improved tax efficiency
- Performance is virtually identical — the TER gap is the only meaningful difference for holders
- For options trading and day trading: SPY. For retirement accounts and buy-and-hold: VOO
Live Comparison
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Bottom Line
For long-term investors: VOO wins decisively on cost. For active traders: SPY's superior liquidity and options market justifies the higher TER. Most individual investors should choose VOO unless they specifically need SPY's trading characteristics.
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Disclaimer: This comparison is for informational and educational purposes only. It does not constitute investment advice. Past performance does not guarantee future results. ETF data is sourced from Yahoo Finance and issuer websites. Always verify current data before making investment decisions.