When people talk about investing, they mostly say the word S and P 500. They say these words because the largest ETFs are marked to S&P 500. They all can be interchangeable because they all are tied with the same index. If you are looking for the advantages then you have to go through the details. There are two s&p 500 etf which are SPY and VOO.
SPY and VOO:
You need not have to spend a lot of time searching about what to invest in. Most of the familiar companies like Apple, Walmart, and many more are investing in these funds. The total cost of ownership would be the main factor in deciding which fund is more sensible. You should know that these two funds are on the same index but are having a slight difference. The cost of the ownership depends on the expense ratio and the trading spread. In this, how much the person depends on the investor and how much they pay to buy and sell the shares.
SPY trading spread:
This is having the lowest trading spread in the market as compared to SPY with VOO. The rate is between 0.002% and 0.003%. It is just a virtual estimation but it depends on the individual situation.
VOO trading speed:
It is having a higher market value with a 0.007% rate. This is one of the cheapest ETFs. It is just a small difference but it can be a disadvantage when you are a frequent trader. So, better think while investing in any of the ETFs.
SPY vs VOO: Total expenses:
When done with VOO vs SPY, VOO is the better choice for retail investors. This solution is not for all investors. If the person is doing a lot of trading, then the advantage of SPY would be making the expense ratio a disadvantage. The person is saving 0.005% on each trade, then it would take 13 trades per year for making 0.0645% which can be the main disadvantage of SPY.
Most of the investors are choosing SPY when SPY vs VOO because the liquidity which is needed is very much high and savings makes it cost-effective. VOO is better for buy-and-hold investors.
SPY vs VOO: Historical performance:
You may see that the VOO expense ratio is less but it is increasing over time. you should look for really beneficial funds. VOO has performed better than SPY by 4%.
SPY is better than VOO when you are a frequent trader. You might see the expense ratio of SPY is more than VOO but it would show better results after some time. VOO can be the best choice when the person is a longer-time investor and waits for some time. There are differences between these two funds. So, it is better to get proper knowledge and then use it. These funds totally depend on the person’s usage.
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