Which ETF is a better buy, VOO or SPY?

This question was posed by MM, DDS

Monday Morning Millionaire Program Answer:

Both VOO (Vanguard’s) and SPY (S&P Depository Receipts) are ETF’s (exchange-traded funds) that track the S&P 500 index. Their 10-year charts are practically identical. (VOO was launched 10 years ago so we cannot go further back.)

However, their expense ratios are .05% and .09% respectively. The .04% difference, albeit small, makes VOO a better choice for long-term investors.

If you manage an “explore” portfolio SPY is a better choice. It is the world’s largest ETF with the biggest number of options contracts outstanding (known as “open interest”). The bid/ask spread is tiny which minimizes transaction costs.

Please note that conservative investors do not need an “explore” portfolio. Such a portfolio is for risk capital only. While it is the only way to beat the S&P 500 index it is highly unlikely to do so.

Dr. Milan Somborac

The Monday Morning Millionaire Program supports do-it-yourself (DIY) investors which I have been for over 50 years. About my team and me

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