VOO holds about $1.6 trillion in assets and has surpassed SPY's roughly $735 billion as the largest S&P 500 ETF (as of May 2026). Both track the same S&P 500 index, yet investors keep asking which one is better.
The answer comes down to small details that add up over time. Things like expense ratios, fund structure, and trading volume can each tilt the scale.
This guide walks through SPY vs VOO with no jargon. If you are also looking at credit building tools, a credit builder card pairs well with a long-term investing plan.
SPY vs VOO: The Quick Answer
Both funds track the S&P 500. The biggest difference is the expense ratio.
- SPY (SPDR S&P 500 ETF Trust): 0.0945% expense ratio. Launched in 1993.
- VOO (Vanguard S&P 500 ETF): 0.03% expense ratio. Launched in 2010.
That fee gap means VOO costs roughly two-thirds less per year. On a $10,000 investment, the difference is small at first. Over 30 years, it can add up to thousands of dollars.
That said, SPY trades more actively. For day traders or options users, the tighter spreads on SPY may matter more than the fee. If you are still weighing whether to keep cash on the sidelines, our saving vs investing guide can help frame the choice.
How the Fund Structures Differ
SPY and VOO are both ETFs, but they use different legal structures.
SPY Is a Unit Investment Trust
SPY is technically a UIT, which is an older structure. UITs cannot reinvest dividends internally. Cash dividends sit in the fund until the next quarterly payout.
This small detail can create a tiny drag during rising markets. The trust cannot reinvest the cash until distribution day.
VOO Is an Open-End Fund
VOO uses the more common open-end ETF structure. The fund can reinvest dividends right away. It can also lend securities to generate small income, which can offset costs.
For long-term investors, the VOO structure tends to be slightly more efficient.
Performance: Are They Really Identical?
Both funds hold the same 500 companies in the same weightings. Returns track very closely.
Over the past 10 years, VOO has edged out SPY by a small margin each year. The difference comes mostly from the lower fee. Performance gaps tend to be measured in basis points, not percentage points.
If you buy and hold for years, that small edge compounds. If you trade frequently, it may not show up at all.
Dividends and Tax Considerations
Both ETFs pay dividends quarterly. SPY and VOO yield roughly the same amount, usually between 1.2% and 1.5% depending on the year.
VOO can be slightly more tax-efficient inside a taxable account. Vanguard's structure allows the fund to manage capital gains carefully. SPY is also tax-efficient, but the UIT format limits some flexibility. The location decision matters too, so review our brokerage account vs retirement account breakdown before choosing a wrapper.
For a tax-advantaged account like an IRA, the difference can be even smaller.
Trading Volume and Liquidity
SPY remains one of the most heavily traded ETFs in the world, with average daily volume frequently running into the tens of millions of shares.
VOO trades plenty for most investors, with daily volume usually in the millions. Spreads remain narrow.
Why does this matter? Higher liquidity tends to mean tighter bid-ask spreads. For active traders or large institutional buyers, SPY can be cheaper to move in and out of. For someone making monthly buys of $200 or $500, both ETFs work fine.
SPY vs VOO for Options Trading
SPY has one of the deepest options markets available. Strike prices are dense, and contracts trade actively.
VOO has options too, but the market is smaller. Bid-ask spreads on VOO options can be wider.
If you plan to sell covered calls or use options strategies, SPY may be the better fit. For plain buy-and-hold investing, VOO usually wins on cost.
How to Buy SPY or VOO
Both ETFs are available on almost every brokerage. Robinhood and Public both let you buy SPY or VOO with no commission. Fractional shares are supported, so you can start with $1. Read our full Robinhood review and Public.com review for a closer look at each app.
Public
Public
Investing for those who take it seriously. Invest in stocks, bonds, options, crypto & more.
Standout feature
A 5%+ yield Bond Account paired with 3.3% APY on cash — Public is one of the only consumer apps where idle and conservative money is treated as seriously as the equity portfolio.
Fees
Free
Pros
• Invest in stocks, bonds, crypto & more• Earn 3.3% APY* on your cash with no fees• 1% match when you transfer your portfolio• Lock in a 5%+ yield with a Bond Account
Cons
Customer support is in-app and email only, no phone
Here is a simple process to get started.
Step 1: Pick a Brokerage
Look for zero commissions, fractional share support, and easy mobile access. Robinhood offers a streamlined app. Public adds community features and built-in education.
Step 2: Fund Your Account
Link a bank account and transfer funds. Many brokerages allow instant deposits for small amounts.
Step 3: Search the Ticker
Type SPY or VOO into the search bar. Review the current price and your available cash before placing an order.
Step 4: Set Up Automatic Buys
Recurring purchases can smooth out market timing. This habit, called dollar-cost averaging, can help reduce the urge to time the top or bottom.
Which Should You Choose?
For most long-term investors, VOO tends to be the better pick because of the lower expense ratio. The small cost edge compounds across decades.
For active traders, options users, or anyone moving large positions, SPY may be worth the slightly higher fee for its deep liquidity.
Neither choice is wrong. Both track the same index. The right one depends on your trading style.
If you are building wealth slowly while also working on your credit, free credit monitoring can help you track your score as your portfolio grows.
Frequently Asked Questions
Is VOO always cheaper than SPY?
Yes, VOO has a lower expense ratio at 0.03% compared to SPY at 0.0945%. That fee difference is constant. Over decades, VOO can save investors a meaningful amount.
Do SPY and VOO pay the same dividend?
Both pay dividends quarterly and yield roughly the same percentage. Small differences may show up due to timing and reinvestment rules. For most investors, the dividend gap is not a major factor.
Can I hold both SPY and VOO?
You can, but you would be holding the same 500 companies twice. Most investors pick one and stick with it. Owning both creates extra paperwork without adding diversification.
Which is better for a Roth IRA?
VOO is usually preferred inside a Roth IRA because of the lower fee. Both work well in tax-advantaged accounts. The expense ratio gap can compound nicely over decades inside a Roth, especially in a Robinhood Roth IRA where contributions may earn a match.
