SPY vs VOO: Which S&P 500 ETF?

Both track the same 500 US companies, but one costs 3x more. Here's what NZ investors need to know.

Key Difference

VOO has a lower expense ratio (0.03% vs 0.09%) while SPY has higher liquidity and tighter spreads. Both track the same S&P 500 index. The fee difference can compound over long time periods.

Head-to-Head Comparison

Feature SPY VOO Winner
Expense Ratio 0.09% 0.03% VOO
Index Tracked S&P 500 S&P 500 Tie
Holdings ~500 ~500 Tie
Dividend Yield ~1.4% ~1.4% Tie
AUM $550B+ $450B+ SPY
Daily Volume 80M+ shares 5M+ shares SPY
Bid-Ask Spread $0.01 $0.01-0.02 SPY
Provider State Street Vanguard -
Structure Unit Trust ETF VOO

The Fee Difference Adds Up

A 0.06% fee difference seems tiny, but it compounds over time:

$50,000 NZD invested over 30 years (7% annual return)

SPY (0.09% fee)

$372,000

VOO (0.03% fee)

$378,000

VOO saves you ~$6,000 NZD over 30 years on a $50,000 investment. For larger portfolios, the savings are even greater.

Key Differences

SPY Characteristics

  • Highest liquidity and tightest spreads
  • Most liquid options market of any ETF
  • Higher expense ratio (0.09%)

VOO Characteristics

  • Lower expense ratio (0.03%)
  • ETF structure (vs SPY's unit trust)
  • Vanguard's investor-owned structure

These are general product characteristics, not recommendations. Consult a licensed financial adviser to assess suitability for your circumstances.

For NZ Investors Specifically

Both available on NZ platforms

Hatch, Stake, Sharesies, and Interactive Brokers all offer both SPY and VOO. No difference in accessibility.

Same tax treatment

Both are US-domiciled ETFs subject to the same FIF rules and 15% US withholding tax (with W-8BEN form).

Currency considerations

Both are priced in USD. Your returns will be affected by NZD/USD exchange rate movements regardless of which you choose.

Summary

Both ETFs track the same index. VOO has lower fees (0.03% vs 0.09%) while SPY has higher liquidity. Your choice may depend on trading frequency, order size, and platform availability.