QQQ vs VOO: Higher Returns, Deeper Drops, and More Overlap Than You Think

VOO tracks the S&P 500: roughly 500 large US companies from every sector of the economy, selected by an index committee using rules on size, liquidity and profitability, and weighted by market value.

QQQ tracks the Nasdaq-100: the 100 largest non-financial companies listed on the Nasdaq stock exchange, also weighted by market value, with rules that trim the very largest positions. Two details matter more than they look. Banks, insurers and other financial companies are excluded by design. And membership depends on where a company lists its shares, so a giant listed on the New York Stock Exchange is left out however innovative it is, while a handful of non-US companies listed on Nasdaq are in.

Because both indexes weight companies by size, the same mega-caps sit at the top of both: names like Apple, Microsoft, Nvidia, Amazon, Alphabet and Meta. The large majority of QQQ's weight is in companies that are also in the S&P 500. So QQQ is not a different set of companies so much as a heavier dose of the biggest ones: in recent years its ten largest holdings have made up about half the fund, against more than a third of VOO.

That is why owning both rarely diversifies anything. Their monthly returns have had a correlation of about 0.9 (the correlations tool shows it for any window), and a 50/50 split of VOO and QQQ is in practice a large-cap US portfolio with an extra technology bet on top. That can be a deliberate choice. It should not be an accident of owning two popular tickers.

Over the roughly 15 years of shared history on the site's compare page (August 2011 to September 2026, monthly data, dividends reinvested), QQQ compounded at about 20% a year against about 15.5% for VOO. Compounded over 15 years, that gap is enormous.

The ride was rougher too. QQQ's annualized volatility ran about 18% against about 14%, and its worst peak-to-trough fall in the window was about -33% versus about -24%, both in the 2022 rate shock. On a risk-adjusted basis the two finished surprisingly close (Sharpe ratios of roughly 1.0 each): QQQ earned most of its extra return by taking extra risk, in a period that happened to reward exactly that risk.

The popular summary is that QQQ is simply riskier, so it falls further in every crash. The record says something more useful: QQQ falls further when the thing crashing is what it concentrates in, and it can fall less when the damage is centered somewhere else.

In the dot-com bust the crash was technology itself: the Nasdaq-100 lost more than 80% from its 2000 peak and needed roughly 15 years to get back to it. In 2008 the epicenter was banks, which the Nasdaq-100 excludes, and QQQ fell slightly less than the S&P 500. In the 2020 COVID crash, technology held up better than energy, travel and financials, and QQQ again fell less. In 2022, rising interest rates hit richly valued growth companies hardest, and QQQ fell about ten points further.

Fees are a real but secondary difference. VOO charges about 0.03% a year. QQQ has long charged about 0.2%, and Invesco also runs QQQM, a separate ETF on the same index with a lower fee, built for buy-and-hold investors rather than the traders who favor QQQ's enormous trading volume. On a $100,000 position the fee gap between VOO and QQQ works out to less than $200 a year: worth knowing, and much smaller than the difference in what the two indexes hold.

QQQ also pays a smaller dividend, because growth companies tend to reinvest profits rather than pay them out. That matters if you want income, and it matters when you compare the funds on price charts, which leave dividends out and so flatter the lower-yielding fund (our total-return guide covers that trap).

Nobody knows which index will lead over the next decade, and the crash record above shows how easily a well-chosen start date can argue either side. The more useful questions are about the portfolio around the fund:

Start with the live head-to-head on the compare page. Then backtest the exact blend you are considering, not just the two funds on their own, and replay it through 2008, 2020 and 2022 in the stress test to see the drop you would actually have lived through. If a 30% to 50% fall in the tech-heavy part of your portfolio would push you to sell, that answer matters more than any 15-year chart.

Educational, not advice: the right mix depends on your goals, your horizon and everything else you own.