Nasdaq 100 is the New S&P 500
VOO tracks the S&P 500 with 504 stocks across all sectors, while QQQ tracks the Nasdaq-100 with just 101 companies—but here's the thing: the overlap is massive. About 95% of QQQ's holdings also appear in VOO, and the Magnificent 7 dominate both funds.
If you read my Window Manifesto, you know that it's the Mag 7 companies that generate the most growth in the current market, and the remaining 497 are barely keeping up with inflation.
Over the past decade, QQQ delivered 19.30% annualized returns compared to VOO's 14.54%. Yes, QQQ is more volatile—it had an 83% maximum drawdown versus VOO's 34%—but the difference is 2x higher gains over the last 15 years.
Owning both doesn't make sense—they're 92% correlated. The real question isn't VOO vs. QQQ anymore. It's whether you believe the next decade belongs to technology. For me, the choice is obvious, and concentration on tech is a feature, not a bug.
If you have access to it, pick QQQM — an optimized younger brother of QQQ, or VGT for even tighter tech sector focus.
