Should I Invest Into QQQ or VOO ETF?

Should you invest in ETFs? Find out the he pros and cons of QQQ and VOO, what indexes they track, and which would be the best option for you to invest in.

Filip Dimkovski
By Filip Dimkovski
Edited by Taj Schlebusch

Published April 19, 2021.

Firstly, let's discuss exchange-traded funds (ETFs). It's pretty smart to invest in these money-makers, mainly because they are diversified, which significantly lowers your risk and are cheaper than other types of stock investments. It is difficult to choose from loads of funds, so I can understand your frustration. Let's briefly go over the pros and cons between QQQ and VOO.

What the Invesco QQQ ETF Has to Offer

This includes 100 of the largest USA and international non-financial stocks listed on the Nasdaq. It has a strong history, earning an average of 9.38% annually, making it an excellent choice for long-term investment. The only drawback I can see is that, out of 102 stocks, half of them are tech-based. Not that tech stocks are a terrible choice, but they are known for their higher volatility in comparison to more established industries.

What the Vanguard S&P 500 ETF Has to Offer

On the other side, The Vanguard S&P 500 ETF tracks the S&P 500, which is a stock market index that includes 500 large US-based corporations. In comparison to QQQ, VOO has more diversification, as they hold over 500 stocks, meaning very low risk. In other words, the money is spread towards different industries. A minor downside is that they were established in 2010, so they don't have a very long track record, even though they earned around 15% annual return.

High Risk or Slow and Steady

I do not doubt that both are fantastic investments, so if you are more into higher risk, go for QQQ. If you want slow and steady growth, invest in VOO.