VOO vs SPY: Which S&P 500 ETF Suits Long-Term Investing?

For new money held for years, I would choose lower-cost VOO. Both track the S&P 500, but annual expenses are 0.03% for VOO and 0.0945% for SPY. That is KRW 64,500 a year on a constant KRW 100 million balance. Why still buy SPY? Execution matters when trading large amounts, turning over a position often or using options.

VOO vs SPY at a glance

Sources and volume measurement dates

As of 2026-10-19, VOO reported a 25-day average of 7,991,361.62 shares/day; SPY reported 7,294,495 shares for one day on its primary exchange. Their periods and coverage differ. The liquidity section below uses trading value over the same period.

Sources: Vanguard VOO and State Street SPY. VOO AUM is its ETF share class, excluding the rest of the USD 1,732.0 billion fund. Volume periods and coverage differ, so their ratio is not meaningful. SPY 0.00% is rounded, not free execution.

Holding both ETFs leaves most stock exposure overlapping. Read VTI vs VOO if you want to expand beyond US large-cap stocks. S&P Dow Jones Indices explains the index’s scope and weighting.

What did KRW 100 million become over ten years?

The comparison covers 2016-09-08 to 2026-09-08, with all distributions reinvested and no contributions. KRW values hold FX constant and exclude personal taxes, commissions and spreads. Fund expenses are already reflected.

The two lines nearly overlap. VOO finished higher, with a final-wealth gap of about 0.53%. Even over ten years, the results stayed close, consistent with their shared market exposure.

2026-09-08Cumulative total return

VOO313.98% SPY311.81%

Cumulative return in percent. Use arrow keys, Home or End to select a date.

USD total return · KRW values hold FX constant.

TradingView Lightweight Charts™ · TradingView

Historical return method

Final value = principal × ending adjusted close / starting adjusted close. Both series use the same 2,513 trading dates and allow fractional shares. The roughly 2.18 percentage-point total-return gap and 0.53% relative wealth gap have different denominators. CAGR is the compounded annual rate. Withholding and payment-date reinvestment can change actual account results. Multiply by ending USD/KRW / starting USD/KRW to add FX changes. See calculation methods for precision and rounding.

How much can the fee gap compound over 10 or 20 years?

On KRW 100 million, the fee-only wealth gap reaches about KRW 1.28 million after ten years and KRW 5.51 million after twenty. Both ETFs are assumed to earn the same 8% gross annual total return. Current expenses stay fixed, with no contributions, FX changes, personal taxes or trading costs. The 8% rate is an illustration, not a forecast.

The starting annual gap is KRW 64,500, but money saved in expenses stays invested. The table includes the growth that money could earn, so the wealth gap differs from the sum of fees paid.

Fee illustration formula

The formula is P × (1 + r − e)^n: principal P, gross annual return r, annual expenses e and years n. Net annual rates are 7.97% for VOO and 7.9055% for SPY. Annual subtraction approximates daily expense accrual. The assumed total return includes reinvestment, so no dividend yield is added. We do not deduct fees again from historical returns. Historical returns and expenses differ from these fixed assumptions, so the two gaps need not match.

Why buy SPY when VOO costs less?

An investor who buys KRW 100 million once and holds for ten years pays execution costs far less often than someone trading that position every week. SPY’s active market deserves attention for large orders and frequent turnover.

The bid and ask on an order screen are separated by a spread. Crossing that gap can cost money each time you trade, and a large order may fill at several price levels. Frequent traders need to consider actual fills alongside annual expenses.

For small monthly contributions held for years, purchase costs apply to each new contribution while annual expenses apply to the growing balance. That investor does not use SPY’s deep market every day. Options users also need to check trading activity at their required expiry and strike.

State Street reported first-half 2026 trading value of about USD 6.19 trillion for SPY and USD 0.76 trillion for VOO. On 2026-06-30, SPY held 99.2% of options open interest among the report’s four S&P 500 ETFs: SPY, IVV, VOO and SPYM. That is not its share of all US options.

Source: State Street, SPY liquidity (2026-08-28). Its USD 25 million order costs are pre-trade estimates; we do not treat them as retail execution observations.

Can reinvested returns differ for the same index?

Even when the same companies pay the dividends, cash can remain inside each ETF for different periods and expenses can differ. SPY holds received dividends in a non-interest-bearing account until distribution. Such differences can create small gaps between an ETF and its index.

In this ten-year window, the annualized reinvested return gap was about 0.06 percentage points. Different expenses and cash handling accompanied a small performance gap. The roughly KRW 2.18 million difference cannot be attributed to expenses alone. SPY investors can use their distributions to buy more shares.

Official NAV returns and fund structure

VOO is an ETF share class of an open-end fund; SPY is a unit investment trust (UIT). SPY’s prospectus dated 2026-01-26 sets out dividend cash handling and investment restrictions.

SPY itself is restricted from lending its portfolio securities. This differs from an investor lending SPY shares from a brokerage account. Structure, cash balances, portfolio adjustments, expenses and market-price deviations from NAV can affect returns. This dataset cannot identify each factor’s exact contribution.

Official ten-year NAV total-return CAGR · ended 2026-09-30 · USD · before personal tax

Metric	VOO	SPY
ETF total return	15.29%	15.18%
S&P 500 total-return index	15.33%	15.33%
Difference from index	−0.04 pp	−0.15 pp

These official NAV disclosures use a different end date and price basis from our adjusted market-close window. We keep them separate. Tracking difference measures performance relative to the index; tracking error measures the variability of periodic excess returns. We did not calculate tracking error and do not rank it.

Latest distributions and source documents

VOO last disclosed USD 1.8226 per share, ex-dividend 2026-09-28 and paid 2026-09-30. Multiplying one payment by four is not a guaranteed annual dividend. SPY declared USD 1.888834 per share, ex-dividend 2026-09-18 and payable 2026-10-30; it remained unpaid on the 2026-10-21 check date. Equal-investment total returns are more useful than comparing raw per-share payments.

Sources: Vanguard product, performance and distributions; the dividends and investment restrictions sections of the SPY prospectus dated 2026-01-26. SPY NAV performance is from the product page linked above; the latest distribution is from State Street distribution records (as of 2026-10-16).

Does frequent trading change the result?

Under these cost assumptions, buy-and-hold left about KRW 1.28 million more in VOO. Selling and repurchasing the whole position weekly, or 52 round trips per year, left about KRW 0.85 million more in SPY. Small differences in execution costs accumulated as turnover rose.

This illustration fixes principal at KRW 100 million for ten years, with an 8% gross annual total return and current fund expenses. Assumed commission is 0.01% per side; full spreads are 0.004% for VOO and 0.002% for SPY. Spreads are scenario inputs, not observed execution costs. FX changes and personal taxes are excluded.

Twelve round trips per year means selling and repurchasing the entire position monthly. That differs from investing new money each month. Trading earns no assumed extra return here; this table is not a reason to trade more often.

Trading-cost formula and exclusions

Per-side cost c = commission + half the full spread. Total legs L = 2 + 2 × extra annual round trips × 10, including the initial purchase and final sale. Final value = fee-adjusted ten-year wealth × (1 − c)^L. Each trade immediately reinvests the remaining balance and preserves market exposure. SPY’s assumed 0.002% spread is not inferred from the rounded 0.00% disclosure. Market impact, FX fees, taxes, cash delays and minimum commissions are excluded.

At a constant KRW 100 million balance, the assumed 0.002 percentage-point round-trip spread gap saves about KRW 2,000. Dividing the KRW 64,500 annual fee gap by that gives roughly 32.25 round trips. This is a simple guide, not the exact compounded break-even point or observed execution cost. Market impact and taxes on sales can change the outcome.

How does the choice depend on your purpose?

For new money I plan to hold for years, my choice is VOO. I would assess an existing SPY position separately: taxes on selling and switching costs may exceed the fees saved. Keeping SPY while directing new contributions to VOO is another option.

Frequently asked questions

Can I reinvest SPY distributions?

Investors can buy more shares with distributions. This differs from the trust holding received dividends in cash. Automatic reinvestment availability depends on the broker.

Are annual fund expenses a separate account withdrawal?

Fund expenses are reflected in fund assets and NAV. They differ from brokerage commissions. Deducting them again from net ETF total returns would double-count them.

Does switching from SPY to VOO always save money?

Sale and purchase costs and personal taxes may exceed future fee savings. Compare the intended holding period, account terms and realized gains.

Compare VOO and SPY over your own dates

Compare VOO and SPY over your own investment dates. Change the reinvestment setting to inspect final wealth and declines along the way. Dividend and tax settings can produce different results from this article.

Open VOO / SPY backtest →

Past performance does not guarantee future returns. Both ETFs can lose value with US large-cap equities. Lower expenses do not protect principal.