The Nasdaq-100 finished with more wealth in this five-year monthly investment comparison.
A beginner can start with a single S&P 500 or Nasdaq-100 ETF instead of repeatedly picking individual stocks. The two may look similar, but they provide different levels of diversification and volatility. Start with the evidence from equal contributions, then choose according to your time horizon and ability to stay invested.
What happened after investing the same amount?
An index cannot be bought directly, so this comparison uses SPY for the S&P 500 and QQQ for the Nasdaq-100. They are representative funds for comparing the two index exposures, not individualized fund recommendations.
- Investment period
- –
- Initial investment
- USD 1,000
- Monthly investment
- USD 500 · day 1
- Total contributions
- $31,500.00
- Distributions
- Fully reinvested
- Currency
- USD · no currency conversion
Purchases use the next trading day when markets are closed. Both funds receive the same contributions on the same schedule. Taxes and transaction fees are not separately deducted.
| Metric | S&P 500
SPY |
Nasdaq-100
QQQ |
|---|---|---|
| Final portfolio value | $49,890.05 | $57,212.30 |
| Cumulative return | +58.38% | +81.63% |
| Annualized return(XIRR) | +17.62% | +23.00% |
| Maximum drawdown | −24.51% | −35.12% |
The Nasdaq-100 had the higher final value and cumulative return under these assumptions. Both results reinvest every distribution.
Cumulative return measures gains relative to total contributions. Each monthly contribution has a different time in the market, so this is not directly comparable to a lump-sum return. XIRR reflects contribution dates and amounts; it does not mean the same return occurred every year.
Each point shows the gain relative to contributions made by that date. Select a date to see both index funds' cumulative returns.
The vertical axis shows cumulative return percentages. Use Left and Right Arrow or Home and End to explore returns by date.
| Date | Fund | Cumulative return |
|---|---|---|
| S&P 500 | 0.00% | |
| Nasdaq-100 | 0.00% | |
| S&P 500 | +58.38% | |
| Nasdaq-100 | +81.63% |
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How does the investment period change the result?
The end date and contribution schedule stay the same while only the start date changes. The periods overlap, so each row is not an independent investment case. A recent winner is not guaranteed to remain ahead.
| Investment period | S&P 500 | Nasdaq-100 |
|---|---|---|
| 1 year
~ |
+10.42% | +16.01% |
| 3 years
~ |
+37.39% | +50.61% |
| 5 years
~ |
+58.38% | +81.63% |
| 10 years
~ |
+132.76% | +209.91% |
| 15 years
~ |
+246.05% | +448.31% |
| 20 years
~ |
+378.60% | +800.72% |
| Maximum history
~ |
+391.44% | +840.23% |
The short answer
- Simplest single choice: an S&P 500 ETF.
- If you accept more growth-stock volatility: a Nasdaq-100 ETF.
- If you want both: use the S&P 500 as the core and Nasdaq-100 as a tilt.
- Before investing: separate emergency savings and money needed soon.
S&P Dow Jones Indices reported that 79% of active U.S. large-cap funds underperformed the S&P 500 in 2025. One year cannot prove that indexing always wins, but it illustrates why a low-cost index fund can be a practical starting point for a beginner.
S&P 500 versus Nasdaq-100
| Feature | S&P 500 | Nasdaq-100 |
|---|---|---|
| Companies | 500 leading U.S. large-cap companies | 100 of the largest Nasdaq-listed non-financial companies |
| Sectors | Broader mix including technology, finance, health care, consumer and industrial companies | Heavier exposure to technology and growth companies |
| Diversification | Broader | More concentrated by company and sector |
| Role | Core exposure to U.S. large caps | A stronger tilt toward large growth companies |
| Volatility | Can fall sharply, but may be relatively less concentrated | Can lead in rallies and feel more volatile in declines |
The S&P 500 represents 500 leading U.S. large-cap companies and uses float-adjusted market-cap weighting. The Nasdaq-100 is not simply “the 100 biggest U.S. companies.” Its official methodology selects large non-financial companies primarily listed on Nasdaq and applies modified market-cap weighting.
A simple choice for beginners
Choose only the S&P 500 when:
- You have little investing experience and daily price moves would make you anxious.
- You plan to invest for at least five years, preferably ten or more.
- You want broad U.S. large-cap exposure rather than a stronger technology bet.
- You value a simple, repeatable contribution plan.
Choose only the Nasdaq-100 when:
- You have a strong long-term conviction in technology and growth businesses.
- You can stay invested through a large short-term decline.
- The money will not be needed for ten years or more.
- You can follow a holding plan instead of chasing recent performance.
Does owning both add diversification?
Not automatically. The S&P 500 already contains many of the same mega-cap technology companies found in the Nasdaq-100. Combining the funds often raises exposure to those companies rather than adding a truly different asset class.
| Style | Example | Meaning |
|---|---|---|
| Simplest | S&P 500 100% | Core U.S. large-cap exposure |
| Growth tilt | S&P 500 70% + Nasdaq-100 30% | Broad core with extra growth exposure |
| Aggressive growth | S&P 500 50% + Nasdaq-100 50% | Greater influence from technology and growth stocks |
These allocations illustrate holding the two indices together. A larger Nasdaq-100 weight increases the emphasis on mega-cap growth stocks.
How far did each fund fall?
The five-year maximum drawdowns were −24.51% for the S&P 500 and −35.12% for the Nasdaq-100. The measure adjusts for new contributions and tracks each fund's decline from a previous peak. Their troughs need not occur on the same date.
For a beginner, the more useful question is often not “which ETF will rise more?” but “which one can I keep owning and funding through a bear market?” Money needed soon should not depend on the stock market recovering on schedule.
What to check before choosing an ETF
- Underlying index: Verify whether it follows the S&P 500 or Nasdaq-100.
- Expense ratio and tracking difference: Small recurring costs compound over long periods.
- Currency exposure: Returns measured in KRW also move with the U.S. dollar exchange rate.
- Distribution policy: Check whether cash is distributed or retained according to the fund structure.
- Trading venue and taxes: Korea-listed and U.S.-listed ETFs can differ in convenience and taxation.
- Fund size and liquidity: Very small or thinly traded products can be less convenient to trade.
Mistakes to avoid
- Making one large emotional purchase after a sharp rally.
- Selling immediately after a decline without reference to your plan.
- Assuming that owning both indices creates complete diversification.
- Investing a home deposit, wedding fund, or car budget needed within one to three years.
- Treating leveraged or inverse ETFs like ordinary long-term index funds.
The Nasdaq-100 led this five-year monthly comparison. For a beginner, I would study the S&P 500 first, then examine Nasdaq-100 holdings and drawdowns when seeking greater growth-company exposure.
Study, compare and begin investing
I believe we should study an understandable ETF and begin investing rather than wait for a perfect stock. Consider broad US exposure versus greater growth-company exposure, then change the starting date and contributions in the backtest. Examine both asset growth and drawdowns to make your plan concrete.
Compare the S&P 500 and Nasdaq-100 on your terms
Adjust the dates, initial investment, monthly contributions and distribution treatment. Choose USD or KRW, or try a lump-sum investment.
Compare in the investment backtest calculatorThese results are in USD. When investing in KRW, exchange rates affect purchases and final values. Language and currency are separate choices; enter amounts in the currency selected in the calculator.
This article combines the author’s investment opinion with a pretax historical simulation. Returns and losses depend on the asset and period. Calculation basis