{"id":2856,"date":"2023-10-19T21:53:39","date_gmt":"2023-10-19T18:53:39","guid":{"rendered":"https:\/\/wikidollar.net\/2856\/original_title-73\/"},"modified":"2023-10-26T00:19:54","modified_gmt":"2023-10-25T21:19:54","slug":"original_title-73","status":"publish","type":"post","link":"https:\/\/wikidollar.net\/?p=2856","title":{"rendered":"Which One Is Right For You?"},"content":{"rendered":"<p>Which One Is Right For You?\u060c<\/p>\n<div>\n<div class=\"custom57181 entry-thumb-disabled single-entry-thumb-disabled mb20\">\n<div class=\"custom90445\">Some links on our website are sponsored and we may earn money when you make a purchase or sign up after clicking through.  Learn more about how we make money.<\/div>\n<\/p><\/div>\n<p>The key to successful investing is finding the right investments for your goals and risk tolerance.  Two of the most popular choices for ordinary investors are <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.ssga.com\/us\/en\/intermediary\/etfs\/funds\/spdr-sp-500-etf-trust-spy\">TO SPY<\/a> And <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/investor.vanguard.com\/investment-products\/etfs\/profile\/voo\">VOO<\/a> exchange-traded funds (ETFs).<\/p>\n<p>SPY is the SPDR S&#038;P 500 ETF. It tracks the performance of the S&#038;P 500 Index and is one of the largest and most actively traded ETFs on the market.<\/p>\n<p>VOO is the Vanguard S&#038;P 500 ETF, which also tracks the S&#038;P 500 Index. It is one of the most popular ETFs with buy-and-hold investors, and a common investment in robo-advisor portfolios .<\/p>\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n<p><strong>SPY vs. Voo Summary<\/strong>:<\/p>\n<ul>\n<li>State Street&#8217;s SPY and Vanguard&#8217;s VOO are both solid ETFs from reputable companies.<\/li>\n<li>As market-cap-weighted funds, SPY and VOO offer the same broad exposure to large U.S. companies.<\/li>\n<li>SPY has an expense ratio of 0.09%, while VOO has an expense ratio of 0.03%.<\/li>\n<li>SPY is one of the most actively traded ETFs and can provide greater liquidity to investors trading options.<\/li>\n<li>Liquidity is not a concern for buy-and-hold investors, which is why VOO is the better choice due to its significantly lower expense ratio.<\/li>\n<\/ul>\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n<h2 class=\"wp-block-heading\" id=\"h-spy-vs-voo-the-slight-differences\"><span class=\"ez-toc-section\" id=\"SPY_vs_VOO_The_Slight_Differences\"\/><strong>SPY vs VOO: the slight differences<\/strong><span class=\"ez-toc-section-end\"\/><\/h2>\n<p>SPY and VOO have very similar historical performances.  For example, in the five-year chart below, their returns before fees were only 0.08% apart.  This slight difference in returns mainly results from the fact that the funds do not update their holdings at exactly the same time.<\/p>\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter size-full\"><img loading=\"lazy\" width=\"1402\" height=\"1176\" alt=\"Five-year returns of SPY vs. VOO.\" nitro-lazy-src=\"https:\/\/cdn-alkia.nitrocdn.com\/pYhxgXnSfZKoVDcmKIiZcCHPcRVbhqvl\/assets\/images\/optimized\/rev-9f9a7d8\/www.thewaystowealth.com\/wp-content\/uploads\/2022\/11\/VOO-Chart-1-650x.png\" nitro-lazy- class=\"wp-image-41937 nitro-lazy\" decoding=\"async\" nitro-lazy-empty=\"\" id=\"MTU0NToyMzI=-1\" src=\"data:image\/svg+xml;nitro-empty-id=MTU0NToyMzI=-1;base64,PHN2ZyB2aWV3Qm94PSIwIDAgNjUwIDU0NSIgd2lkdGg9IjY1MCIgaGVpZ2h0PSI1NDUiIHhtbG5zPSJodHRwOi8vd3d3LnczLm9yZy8yMDAwL3N2ZyI+PC9zdmc+\"\/><figcaption class=\"wp-element-caption\"><em>Five-year returns of SPY vs. VOO.<\/em><\/figcaption><\/figure>\n<\/div>\n<p>Over a one-year horizon (as shown below), SPY slightly outperformed VOO (0.04%) before fees.<\/p>\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter size-full\"><img loading=\"lazy\" width=\"1380\" height=\"1130\" alt=\"One year chart for SPY vs VOO.\" nitro-lazy-src=\"https:\/\/cdn-alkia.nitrocdn.com\/pYhxgXnSfZKoVDcmKIiZcCHPcRVbhqvl\/assets\/images\/optimized\/rev-9f9a7d8\/www.thewaystowealth.com\/wp-content\/uploads\/2022\/11\/One-Year-SPY-vs-VOO-Chart-650x.png\" nitro-lazy- class=\"wp-image-41938 nitro-lazy\" decoding=\"async\" nitro-lazy-empty=\"\" id=\"MTU0ODoyNDM=-1\" src=\"data:image\/svg+xml;nitro-empty-id=MTU0ODoyNDM=-1;base64,PHN2ZyB2aWV3Qm94PSIwIDAgNjUwIDUzMiIgd2lkdGg9IjY1MCIgaGVpZ2h0PSI1MzIiIHhtbG5zPSJodHRwOi8vd3d3LnczLm9yZy8yMDAwL3N2ZyI+PC9zdmc+\"\/><figcaption class=\"wp-element-caption\"><em>One-year returns of SPY vs. VOO.<\/em><\/figcaption><\/figure>\n<\/div>\n<p>Examine the key data for these two ETFs and you&#8217;ll see that they vary only slightly, with the main exception being the relatively high trading volume for SPY.  Beyond that, the difference in yield is explained by SPY&#8217;s higher expense ratio.<\/p>\n<figure class=\"wp-block-table is-style-stripes\">\n<table>\n<tbody>\n<tr>\n<td\/>\n<td><strong>VOO<\/strong><\/td>\n<td><strong>TO SPY<\/strong><\/td>\n<\/tr>\n<tr>\n<td><strong>Expense rate:<\/strong><\/td>\n<td>0.03%<\/td>\n<td>0.09%<\/td>\n<\/tr>\n<tr>\n<td><strong>Average volume (10 days):<\/strong><\/td>\n<td>4,702,284<\/td>\n<td>93,892,358<\/td>\n<\/tr>\n<tr>\n<td><strong>SEC yield (30 days):<\/strong><\/td>\n<td>1.63%<\/td>\n<td>1.55%<\/td>\n<\/tr>\n<tr>\n<td><strong>Price\/profit:<\/strong><\/td>\n<td>19.5<\/td>\n<td>19.5<\/td>\n<\/tr>\n<tr>\n<td><strong>Price\/book value:<\/strong><\/td>\n<td>3.6<\/td>\n<td>3.6<\/td>\n<\/tr>\n<tr>\n<td><strong>Price\/income:<\/strong><\/td>\n<td>2.3<\/td>\n<td>2.3<\/td>\n<\/tr>\n<tr>\n<td><strong>Price\/cash flow:<\/strong><\/td>\n<td>14.3<\/td>\n<td>14.3<\/td>\n<\/tr>\n<tr>\n<td><strong>Sales growth:<\/strong><\/td>\n<td>7.9<\/td>\n<td>7.9<\/td>\n<\/tr>\n<tr>\n<td><strong>Cash flow growth:<\/strong><\/td>\n<td>11.6<\/td>\n<td>11.6<\/td>\n<\/tr>\n<tr>\n<td><strong>Growth in book value:<\/strong><\/td>\n<td>7.9<\/td>\n<td>7.9<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/figure>\n<h2 class=\"wp-block-heading\" id=\"h-state-street-global-advisors-vs-vanguard\"><span class=\"ez-toc-section\" id=\"State_Street_Global_Advisors_vs_Vanguard\"\/><strong>State Street Global Advisors vs. Vanguard<\/strong><span class=\"ez-toc-section-end\"\/><\/h2>\n<p>The company that manages SPY is <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.ssga.com\/us\/en\/intermediary\/ic\">State Street Global Advisors<\/a>while VOO is managed by <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/investor.vanguard.com\/home\">Vangu<\/a><a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/investor.vanguard.com\/home\">A<\/a><a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/investor.vanguard.com\/home\">rd<\/a>.<\/p>\n<p>These are two large financial institutions with solid reputations.<\/p>\n<p>State Street is one of the largest asset managers in the world, with $4.4 trillion in assets under management (AUM) as of December 2021. The company has been in operation since 1978.<\/p>\n<p>Vanguard had $7 trillion in assets under management as of December 2021. The company was founded in 1975 by Jack Bogle, who popularized the idea of \u200b\u200bindex investing.  Vanguard is a customer-owned company, so its primary goal is to serve its customers\/investors.<\/p>\n<p>State Street focuses on providing asset management services to institutions.  You cannot invest directly with State Street as an individual, but you can purchase SPY stock on the <a href=\"https:\/\/wikidollar.net\/2395\/top-10-halves-on-open-market\/\">open market<\/a>. <\/p>\n<p>Anyone can open a Vanguard account.<\/p>\n<h2 class=\"wp-block-heading\" id=\"h-spy-vs-voo-faqs\"><span class=\"ez-toc-section\" id=\"SPY_vs_VOO_FAQs\"\/><strong>SPY vs. VOO FAQ<\/strong><span class=\"ez-toc-section-end\"\/><\/h2>\n<div class=\"schema-faq wp-block-yoast-faq-block\">\n<div class=\"schema-faq-section\" id=\"faq-question-1668563697524\"><strong class=\"schema-faq-question\"><strong>How to invest in SPY and VOO?<\/strong><\/strong> <\/p>\n<p class=\"schema-faq-answer\">All online brokerages offer SPY and VOO because they are ETFs listed on the New York Stock Exchange.  Factors to consider when choosing a brokerage include fees, whether or not the brokerage offers IRAs, and the ability to purchase fractional shares.  For more information, see our guide to getting started investing.  For small investors, check out our guide to investing with little money.<\/p>\n<\/p><\/div>\n<div class=\"schema-faq-section\" id=\"faq-question-1668563705033\"><strong class=\"schema-faq-question\"><strong>Are SPY or VOO more volatile?<\/strong><\/strong> <\/p>\n<p class=\"schema-faq-answer\">SPY and VOO have the same volatility over time because they track the S&#038;P 500 and use a market cap-weighted strategy.<\/p>\n<p>This means that allocations for each stock in the portfolio are based on the stock&#8217;s market capitalization.  For example, if Apple represents 5% of the total market capitalization of the S&#038;P 500, the fund allocates 5% to Apple stocks.<\/p>\n<p>In contrast, equal-weighted funds are allocated based on the number of stocks in the index.  For example, if Apple was one of the 500 stocks in a given index, its weighting would be 1\/500th of the portfolio.<\/p>\n<\/p><\/div>\n<div class=\"schema-faq-section\" id=\"faq-question-1668563728308\"><strong class=\"schema-faq-question\"><strong>What is the minimum investment for SPY and VOO?<\/strong><\/strong> <\/p>\n<p class=\"schema-faq-answer\">There is no minimum investment for both ETFs.  However, some brokerages have minimum investment requirements and some restrict you from purchasing fractional shares.  Vanguard offers fractional share investing in its ETFs and is therefore a solid choice for those looking to invest in VOO.<\/p>\n<\/p><\/div>\n<\/p><\/div>\n<h2 class=\"wp-block-heading\" id=\"h-the-bottom-line-on-spy-vs-voo\"><span class=\"ez-toc-section\" id=\"The_Bottom_Line_on_SPY_vs_VOO\"\/><strong>The bottom line on SPY vs. VOO<\/strong><span class=\"ez-toc-section-end\"\/><\/h2>\n<p>So, which is the better choice: SPY or VOO? <\/p>\n<p><strong>For most investors, the answer is VOO.<\/strong><\/p>\n<p>VOO wins due to its slightly lower expense ratio.  Although 0.06% isn&#8217;t a big difference, it adds up over several decades.<\/p>\n<p>For example, someone who invests $500 per month for 40 years with an annual return of 8% will see their portfolio grow to $1,565,201.  Reduce these average returns by 0.06% (the difference between the SPY and VOO expense ratios), and the result is a portfolio worth $1,540,612.<\/p>\n<p><strong>That&#8217;s a difference of almost $25,000.<\/strong><\/p>\n<p>If 0.06% makes that much of a difference, imagine how much you&#8217;re giving up by paying 1% in fees, which many investors do.  That&#8217;s why we recommend checking your fees \u2013 including fees often hidden in a 401(k) \u2013 using Empower&#8217;s free Fee Analyzer. <\/p>\n<p>If you are investing in a 401(k) where VOO is not an option but SPY is, then you must recognize that SPY remains a very inexpensive, low-risk way to invest in the market as a whole. <\/p>\n<p>While not the lowest expense ratio ETF, there are many index funds with an expense ratio above 0.20%.  In other words, it&#8217;s not like you&#8217;re getting scammed with SPY: it&#8217;s barely more expensive than VOO.<\/p>\n<p>For the rare investor looking to trade ETF options, consider SPY for its high trading volume, which can help with liquidity. <\/p>\n<div class=\"author-box\">\n<div class=\"author-avatar\"><img loading=\"lazy\" width=\"180\" height=\"180\" alt=\"RJ Weiss\" nitro-lazy-src=\"https:\/\/cdn-alkia.nitrocdn.com\/pYhxgXnSfZKoVDcmKIiZcCHPcRVbhqvl\/assets\/desktop\/optimized\/rev-9f9a7d8\/secure.gravatar.com\/avatar\/4eeb73d702f84955cfbbcf965a72a885.b9c89429036c42305756b7997deda04d\" nitro-lazy- class=\"avatar avatar-180 wp-user-avatar wp-user-avatar-180 photo avatar-default nitro-lazy\" decoding=\"async\" nitro-lazy-empty=\"\" id=\"MTU3NToyNzc=-1\" src=\"data:image\/svg+xml;nitro-empty-id=MTU3NToyNzc=-1;base64,PHN2ZyB2aWV3Qm94PSIwIDAgMTgwIDE4MCIgd2lkdGg9IjE4MCIgaGVpZ2h0PSIxODAiIHhtbG5zPSJodHRwOi8vd3d3LnczLm9yZy8yMDAwL3N2ZyI+PC9zdmc+\"\/><\/div>\n<div class=\"author-box__text\">\n<p>RJ Weiss, founder of The Ways To Wealth, has been a CERTIFIED FINANCIAL PLANNER\u2122 since 2010. With a BA in finance and having completed the CFP\u00ae certification program at the American <a class=\"wpil_keyword_link\" href=\"https:\/\/wikidollar.net\/tag\/college\/\"   title=\"College\" data-wpil-keyword-link=\"linked\">College<\/a>, RJ combines a formal education with a deep commitment to provide impartial financial services.  knowledge.  Recognized as a trusted authority in finance, his expertise is featured in major publications such as Business Insider, New York Times and Forbes.<\/p>\n<\/div>\n<\/div>\n<footer class=\"single-footer entry-footer\">\n<\/footer><\/div>\n<p><script id=\"bf8383528dc01a5644558d5ff98e3c8b-1\" type=\"nitropack\/inlinescript\" class=\"nitropack-inline-script\">\n!function(f,b,e,v,n,t,s)\nif(f.fbq)return;n=f.fbq=function()n.callMethod?\nn.callMethod.apply(n,arguments):n.queue.push(arguments);\nif(!f._fbq)f._fbq=n;n.push=n;n.loaded=!0;n.version='2.0';\nn.queue=[];t=b.createElement(e);t.async=!0;\nt.src=v;s=b.getElementsByTagName(e)[0];\ns.parentNode.insertBefore(t,s)(window, document,'script',\n'https:\/\/connect.facebook.net\/en_US\/fbevents.js');\nfbq('init', '845813415539410');\nfbq('track', 'PageView');\n<\/script><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Which One Is Right For You?\u060c Some links on our website are sponsored and we may earn money when you make a purchase or sign up after clicking through. Learn more about how we make money. The key to successful investing is finding the right investments for your goals and risk tolerance. Two of the [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":2857,"comment_status":"closed","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2826],"tags":[],"class_list":["post-2856","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-make-money"],"blocksy_meta":[],"_links":{"self":[{"href":"https:\/\/wikidollar.net\/index.php?rest_route=\/wp\/v2\/posts\/2856","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/wikidollar.net\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/wikidollar.net\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/wikidollar.net\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/wikidollar.net\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=2856"}],"version-history":[{"count":2,"href":"https:\/\/wikidollar.net\/index.php?rest_route=\/wp\/v2\/posts\/2856\/revisions"}],"predecessor-version":[{"id":4658,"href":"https:\/\/wikidollar.net\/index.php?rest_route=\/wp\/v2\/posts\/2856\/revisions\/4658"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/wikidollar.net\/index.php?rest_route=\/wp\/v2\/media\/2857"}],"wp:attachment":[{"href":"https:\/\/wikidollar.net\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=2856"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/wikidollar.net\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=2856"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/wikidollar.net\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=2856"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}