S&P 500 vs QQQ: Comparing Two Major Market Indices

QQQ tracks the Nasdaq-100: about 100 non-financial growth names, roughly half in technology, no banks and no small caps. It has beaten the S&P 500 over the past decade but fell harder in 2000 and 2022. VOO and SPY track the broad S&P 500. QQQ is a concentrated growth tilt; the S&P 500 is the diversified core.

Key takeaways

• Different indexes. VOO and SPY track the S&P 500 (500 large-cap U.S. companies across all 11 sectors). QQQ and QQQM track the Nasdaq-100, the 100 largest non-financial companies on the Nasdaq.
• Concentration is the real difference. The Nasdaq-100 holds roughly 50% information technology, about 16% communication services, and about 12% consumer discretionary, with zero financials and no small caps. The S&P 500 spreads across every sector.
• Cost. VOO charges 0.03% and QQQM charges 0.15%. QQQ now charges 0.18% after its December 2025 conversion to an open-end fund. SPY charges 0.0945%.
• Returns. QQQ returned 18.97% annualized over the 10 years ended March 31, 2026, versus 14.15% for the S&P 500 (Motley Fool, citing Invesco/S&P data).
• Risk. That extra return came with deeper drawdowns: the Nasdaq-100 fell roughly 83% in 2000-2002 and about 33% in 2022, against roughly 57% and 18% for the S&P 500.
• Who fits. QQQ is a growth tilt for investors who can stomach volatility. The S&P 500 is the diversified core most portfolios build around.

S&P 500 vs QQQ at a glance

What each fund actually holds

The S&P 500 is a committee-selected list of 500 large U.S. companies weighted by market cap, spanning technology, financials, healthcare, industrials, energy, consumer names, and more. VOO (Vanguard) and SPY (State Street) both track it. The main split between them is cost and liquidity: VOO is cheaper at 0.03%, SPY trades more heavily and suits active traders. For a fuller breakdown, see SPY vs the S&P 500.

QQQ tracks the Nasdaq-100, which by rule holds the 100 largest non-financial companies listed on the Nasdaq. That single exclusion, financials, plus the Nasdaq listing requirement, reshapes the whole fund. You get a heavy load of megacap technology, communication services, and consumer discretionary names, and none of the banks, insurers, or small caps that sit in a total-market fund. QQQM is Invesco's cheaper, buy-and-hold version of the same index at 0.15%.

Concentration and risk: the honest tradeoff

The Nasdaq-100 and the S&P 500 share most of their biggest names, so the two funds move together more often than not. The sibling piece on the Nasdaq-100 and S&P 500 overlap covers exactly how much they share. The difference that matters here is weighting. With about half of QQQ in a single sector and nothing in financials, the fund is a concentrated bet on growth and technology rather than a diversified slice of the economy.

That concentration cuts both ways. Over the past decade it paid off: QQQ compounded at 18.97% a year versus 14.15% for the S&P 500 through March 31, 2026, a gap that turns a $10,000 stake into a far larger sum over ten years. But the drawdowns were brutal. In the 2000-2002 dot-com bust the Nasdaq-100 lost roughly 83% and took over a decade to reclaim its high, while the S&P 500 fell about 57%. In 2022 the Nasdaq-100 dropped about 33% against roughly 18% for the S&P 500. Higher return, higher volatility, deeper holes. That is the deal.

If you want a longer performance study across full market cycles, see S&P 500 vs Nasdaq-100 over the long term.

Who each one fits

The S&P 500 fits investors who want one diversified holding to anchor a portfolio: broad sector exposure, lower volatility, and rock-bottom cost through VOO. It is the default core for most long-term and FIRE portfolios because it does not depend on one sector staying in favor.

QQQ fits investors who want a deliberate tilt toward growth and technology and can sit through 30% to 80% drawdowns without selling. Many hold it as a satellite alongside an S&P 500 core rather than as the whole portfolio, which captures some of the upside while keeping the diversified base intact. QQQM is the better pick for pure buy-and-hold at 0.15%; QQQ's tighter spreads and options market suit active traders.

Neither is objectively better. The S&P 500 gives you the market. QQQ gives you a concentrated slice that has outrun the market when technology leads and lagged hard when it does not. Match the choice to your risk tolerance and time horizon, and revisit the S&P 500 hub for the full set of comparisons.

Frequently asked questions

What index does QQQ track versus VOO and SPY?

QQQ and QQQM track the Nasdaq-100, the 100 largest non-financial companies on the Nasdaq. VOO and SPY track the S&P 500, which holds 500 large-cap US companies across all 11 GICS sectors. The Nasdaq-100 excludes financials and small caps entirely, holding roughly 50% information technology, about 16% communication services, and about 12% consumer discretionary.

Has QQQ outperformed the S&P 500?

Yes, over the past decade. QQQ returned 18.97% annualized over the 10 years ended March 31, 2026, versus 14.15% for the S&P 500. But that extra return came with deeper drawdowns: the Nasdaq-100 fell roughly 83% in 2000 to 2002 and about 33% in 2022, against roughly 57% and 18% for the S&P 500. Higher return, higher volatility, deeper holes.

Is QQQ or the S&P 500 better for a long-term portfolio?

Neither is objectively better; it depends on risk tolerance. The S&P 500 is the diversified core most portfolios build around, with broad sector exposure and lower volatility through VOO at 0.03%. QQQ is a concentrated growth tilt for investors who can sit through 30% to 80% drawdowns. Many hold QQQ as a satellite alongside an S&P 500 core rather than the whole portfolio.

What is the difference between QQQ and QQQM?

QQQ and QQQM track the same Nasdaq-100 index, but QQQM is Invesco's cheaper, buy-and-hold version at a 0.15% expense ratio. QQQ charges 0.18% after its December 2025 conversion to an open-end fund, and its tighter spreads and larger options market suit active traders. For pure buy-and-hold, QQQM is the better pick.