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SPY Vs QQQ: Which one is Better?

This article will compare the SPY Vs QQQ, the first replicating the S&P500 and the other the Nasdaq100.

There was always a controversy among investors on which investing plan is better. Either investing in technology stocks or only in the most profitable companies.

The choice is not apparent and may depend on multiple factors and economic cycles. ETFs that replicate those two options are the subject of our article.

We will compare the SPY Vs QQQ, the first replicating the S&P500 and the other the Nasdaq100.

Let's help you make a decision!

SPY VS QQQ Overview

SPDR S&P 500 ETF Trust VS Invesco QQQ Trust

TickerSPYQQQ
Expense Ratio0.09%0.20%
IssuerState Street Global AdvisorsVanguard
Underlying IndexS&P 500NASDAQ-100 Index
Assets Under Management$346.10B$169.81B
Average Daily $ Volume$36.64B$21.03B
Dividend Yield1.58%0.62%%

SPDR S&P 500 ETF Trust (SPY)

SPY is the first ever ETF to follow the broad U.S. S&P 500 index and became one of the top global ETFs with a 12.98% return during the past decade. People sometimes mix up SPY with SPX so if you're not sure what the 2 are about check out our SPY vs SPX article.

It is also the most liquid ETF and one of the best US ETFs, with over $346.10 billion in assets under management (AUM) and an average daily volume of $36.64 billion.

Top 10 Sectors:

  • Technology Services          17.17%
  • Electronic Technology        14.26%
  • Finance                              13.34%
  • Health Technology             11.47%
  • Retail Trade                        7.42%
  • Consumer Non-Durables    5.88% 
  • Energy Minerals                 3.73%
  • Producer Manufacturing    3.50%
  • Consumer Services           3.50%
  • Utilities                               3.13%

Top 10 Holdings: 

  • Apple                                                       6.57%
  • Microsoft                                                  6.00%
  • Amazon                                                    2.90%                                           
  • Alphabet(Google) Class A                       2.05%
  • Alphabet(Google) Class C                       1.88%
  • Tesla                                                        1.76%
  • Berkshire Hathaway                                1.54%
  • Unitedhealth group                                  1.51%
  • Johnson & Johnson                                 1.46%
  • NVIDIA Corporation                                1.19%
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Invesco QQQ Trust (QQQ)

The QQQ tracks the Nasdaq 10, which is composed of 100 of the largest international and domestic companies, excluding financial companies, listed on the Nasdaq Stock Exchange according to market capitalization. Therefore, QQQ strongly focuses on large-cap technology companies and is often considered a snapshot of how the technology sector is performing.

Top 10 Sectors:

  • Technology Services         32.88%
  • Electronic Technology       26.97%
  • Retail Trade                       11.10%
  • Health Technology             6.41%
  • Consumer Services           5.21%
  • Consumer Durables           5.16%
  • Consumer Non-Durables   4.31%
  • Producer Manufacturing    2.02%
  • Communications                1.58%
  • Utilities                               1.35%

Top 10 Holdings:

  • Apple                                       13.01%
  • Microsoft                         10.33%
  • Amazon                         6.40%
  • Tesla                                                     3.82%
  • Alphabet(Google) Class C                 3.64%
  • Meta Platform                                       3.21%
  • NVIDIA Corporation                           3.18%
  • PepsiCo, Inc                                       2.08%
  • Costco Wholesale Corporation             1.84%

SPY Vs QQQ: Comparison

Fees:

An essential element to consider are fees, which you need to pay when holding the ETFs. They are the cost related to administrative and marketing expenses of the fund.

Fees will affect your returns; more fees equal fewer returns.

In our case, the Invesco QQQ Trust is only a 0.2% expense ratio against 0.9% for the SPY, which makes the QQQ very cheap.

Performances SPY Vs QQQ:

Yearly Performance SPYQQQ
1 Year-10.17%-20.57%
3 Years10.61%14.73%
5 Years11.45%17.87%
10 Years12.98%17.43%

The QQQ has performed better than the SPY over the last decade; the technological stocks, especially the GAFAM(Google, Amazon, Facebook, Apple, and Microsoft), performed tremendously.

But excellent performance means higher risks. The QQQ is a volatile ETF; as you can see, the returns have dropped over 20% for the QQQ and only 10% for the SPY.

So yes, the QQQ offers big returns but with more significant risk. On the other hand, the SPY is less volatile.

How to Buy SPY or QQQ ETFs?

Step 1 - Find the best investment app: 

Check out our investment app comparison page, you will get a precise idea of which app or broker suits you best, and answers all your financial needs.

Step 2 - Open an account:

Now that you are confident in your choice of a trading platform, it's best to open an account. With a simple click on the button on our comparison page, you can jump straight to the registration page of the brokers.

You must complete the necessary steps and wait for a confirmation email to activate your account.

Step 3 - Verify your identity:

Please make sure that you have completed this step if you want to use the platform's features and be able to withdraw and deposit. Some platforms will allow you to make a small deposit but not withdraw until the process is complete.

At this point you will upload your ID and possibly, depending on the platform, other supporting documents to prove your identity.

Occasionally, you might receive a phone call from a company's sales representatives.

The duration of the process can range from a few hours to a few days.

Step 4 - Deposit funds:

After verifying your identity, you can deposit with several methods:

  • Credit/debit cards
  • Bank transfers
  • Mobile wallets (Paypal).

Step 5 - Buy SPY or QQQ ETFs: 

Once the account is active, you can search for “SPY” or “QQQ” on the platform and click on buy. 

Start Investing Now

SPY and QQQ are different; your choice may depend on your financial objectives and time horizon. Of course, the QQQ has better returns and lower fees, but it is risky, and you must be ready to take on those risks.

The SPY is for risk-averse investors that want a steady income for the long-term run.

The QQQ is suitable for trading and aggressive ETF investment strategies, but if you want to buy and hold and not bother with looking at your charts daily, the SPY might be the play.

However, once you buy a couple of ETFs, you should keep track of your investments. We  

specially built an investment tracking spreadsheet to assist you.

Now that you understand which ETFs are suitable look at our investment platform comparison page and get the perfect broker to begin investing.

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