Is Vanguard VOO or Invesco QQQ the Better Buy? How S&P 500 Diversification Compares to Tech-Focused Growth
Key Points
QQQ charges a higher expense ratio and offers a lower dividend yield than VOO.
QQQ has outperformed VOO on one- and five-year growth, but with deeper drawdowns and greater volatility.
QQQ leans more heavily into technology and communication services, while VOO mirrors the broader S&P 500 sector mix.
- 10 stocks we like better than Invesco QQQ Trust ›
The Vanguard S&P 500 ETF (NYSEMKT:VOO) and the Invesco QQQ Trust, Series 1 ETF (NASDAQ:QQQ) both track large-cap U.S. equities, yet their approaches and sector exposures diverge.
This comparison weighs their fees, performance, risk, and portfolio makeup to help clarify which may appeal more based on an investor’s preferences for cost, yield, growth, and risk profile.
Snapshot (cost & size)
| Metric | VOO | QQQ |
|---|---|---|
| Issuer | Vanguard | Invesco |
| Expense ratio | 0.03% | 0.18% |
| 1-yr return (as of Feb. 7, 2026) | 13.92% | 15.12% |
| Dividend yield | 1.11% | 0.45% |
| Beta (5Y monthly) | 1.00 | 1.12 |
| AUM | $839 billion | $412 billion |
Beta measures price volatility relative to the S&P 500. The 1-yr return represents total return over the trailing 12 months.
VOO is notably more affordable with a 0.03% expense ratio, while QQQ charges 0.18%. VOO also offers a higher dividend yield than QQQ, which may appeal to investors seeking income alongside growth.
Performance & risk comparison
| Metric | VOO | QQQ |
|---|---|---|
| Max drawdown (5 y) | -24.53% | -35.12% |
| Growth of $1,000 over 5 years | $1,782 | $1,840 |
What's inside
QQQ tracks the NASDAQ-100 with 101 holdings, and it has a pronounced tilt toward technology (making up 51% of assets) and communication services (17%). Its largest positions are Nvidia, Apple, and Microsoft. The fund, launched over 26 years ago, is concentrated in high-growth sectors and top names.
VOO, in contrast, mirrors the broader S&P 500, with 35% of the fund allocated to technology, 13% to financial services, and 11% to communication services. Its top holdings are also Nvidia, Apple, and Microsoft, but at slightly lower weights.
For more guidance on ETF investing, check out the full guide at this link.
What this means for investors
VOO and QQQ are both massive, popular funds that focus on large-cap stocks. While QQQ is more concentrated in tech, VOO offers greater diversification.
QQQ’s biggest advantage lies in its potential for above-average returns. It leans more heavily on tech stocks compared to VOO, and it’s designed for growth. It’s managed to achieve that, too, outperforming VOO in both one- and five-year total returns.
However, greater earning potential often comes with higher levels of risk. QQQ has both a higher beta and a deeper max drawdown, indicating more significant price fluctuations over the last five years.
VOO shines in its diversification, with roughly five times as many holdings as QQQ. It’s less tilted toward tech stocks, which can help reduce sector volatility. The downside, though, is that because it follows the market by tracking the S&P 500, it can only ever earn average returns.
Investors seeking a more stable long-term investment that’s less prone to volatility may prefer VOO’s diversification, while those eager for above-average growth may opt for QQQ — with the understanding that it comes with slightly higher risk.
Should you buy stock in Invesco QQQ Trust right now?
Before you buy stock in Invesco QQQ Trust, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Invesco QQQ Trust wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $443,299!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,136,601!*
Now, it’s worth noting Stock Advisor’s total average return is 914% — a market-crushing outperformance compared to 195% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
See the 10 stocks »
*Stock Advisor returns as of February 8, 2026.
Katie Brockman has positions in Vanguard S&P 500 ETF. The Motley Fool has positions in and recommends Apple, Microsoft, Nvidia, and Vanguard S&P 500 ETF. The Motley Fool has a disclosure policy.
Recommended Articles
