SPY vs QQQ: Which ETF Should You Buy?
SPY and QQQ are two of the most popular and heavily traded ETFs in the world. SPY tracks the broad S&P 500 while QQQ focuses on the tech-heavy Nasdaq-100.
What Is SPY (S&P 500)?
SPY tracks the S&P 500 index — 500 of the largest US companies across all sectors. It is the most diversified of the two and is considered the benchmark for the US stock market.
What Is QQQ (Nasdaq-100)?
QQQ tracks the Nasdaq-100 index — the 100 largest non-financial companies listed on the Nasdaq. It is heavily weighted toward technology and has historically delivered higher growth but with more volatility.
Key Differences
| Feature | SPY (S&P 500) | QQQ (Nasdaq-100) |
|---|---|---|
| Holdings | 500 companies, all sectors | 100 companies, tech-heavy |
| Tech exposure | ~30% | ~60% |
| Diversification | Higher | Lower |
| Volatility | Lower | Higher |
| Dividend yield | ~1.5% | ~0.6% |
| Expense ratio | 0.09% | 0.20% |
The Bottom Line
SPY is better for broad market exposure and lower volatility. QQQ is better if you want higher growth potential and are comfortable with tech concentration. Many investors hold both.
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