Market Analysis2025-09-28

Global Market Volatility Rises: Time to Reassess VOO vs SPY Cost Efficiency

As global market volatility increases, long-term investors are turning their attention to cost-efficient S&P 500 ETFs. We analyze VOO and SPY to help you determine which is the better choice.

관리자Naver

Amid rising global market volatility, investors are seeking stable yet cost-efficient investment options. Interest is growing in which S&P 500 index-tracking ETF to choose between the Vanguard S&P 500 ETF (VOO) and the SPDR S&P 500 ETF Trust (SPY). While both ETFs track the same index, they differ in costs, dividend handling, and trading volume, meaning the optimal choice depends on each investor's goals. Since the selection of core assets in an asset allocation strategy significantly affects long-term performance, careful consideration is warranted.

Cost Structure and Long-Term Impact Analysis

VOO's greatest advantage is its extremely low expense ratio of 0.03%, compared to SPY's 0.09%, which is three times higher. Over the long term, this difference can have a substantial impact. For example, if you invest 100 million KRW over 30 years at an assumed annual return of 7%, VOO would incur approximately 300,000 KRW per year in expenses while SPY would cost around 900,000 KRW. Over 30 years, when compounding is factored in, this difference can amount to tens of millions of KRW. When setting long-term goals in an asset allocation calculator, this cost difference must be taken into account. Younger investors especially benefit more from cost savings due to their longer investment horizon.

Comparing Liquidity and Trading Convenience

SPY, launched in 1993 as the first ETF in the US, boasts the highest trading volume and liquidity of any ETF. Its daily volume far exceeds VOO's, minimizing market impact during large transactions. SPY also has an active options market, making it advantageous for investors who employ hedging strategies. VOO, by contrast, has lower trading volume but still offers sufficient liquidity for typical investment purposes. For individual investors focused on long-term holding, cost efficiency often matters more than trading volume. When using a rebalancing calculator, consider SPY if you rebalance frequently, and VOO if you prioritize long-term buy-and-hold investing.

Differences in Dividend Handling

VOO and SPY also differ in how they handle dividends. VOO pays dividends on a quarterly basis, while SPY uses a combination of monthly and quarterly distributions. This provides different advantages depending on how investors manage their cash flow. Retirees who need regular income may prefer SPY's more frequent dividend payments. On the other hand, younger investors focused on compound growth through dividend reinvestment may find that total return matters more than dividend frequency. It's important to choose the right ETF based on the role dividend income plays in your asset allocation strategy.

Portfolio Role and Combination Strategies

Regardless of whether you choose VOO or SPY, S&P 500 ETFs serve as a core holding in most portfolios. They are typically allocated at 60-80% of total equity exposure, with the remainder diversified across international stocks, small-caps, and sector-specific ETFs. If you choose VOO, you could consider redirecting the cost savings toward other ETFs or allocating to more aggressive growth-oriented funds such as QQQ or VGT. If you choose SPY, you can leverage its high liquidity to pursue a more active rebalancing strategy. When adjusting target allocations in a rebalancing calculator, it's advisable to build a strategy that aligns with the characteristics of the ETF you've selected.

결론

VOO is well-suited for investors who prioritize cost efficiency, while SPY is better for those who value liquidity and trading flexibility. From a long-term investment perspective, VOO's cost advantage is significant, so we recommend using an asset allocation calculator and a rebalancing calculator to find the approach that best fits your individual investment style.

#VOO vs SPY#rebalancing calculator#asset allocation calculator#cost efficiency#S&P 500#long-term investing#ETF comparison

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Cost Structure and Long-Term Impact Analysis

Comparing Liquidity and Trading Convenience

Differences in Dividend Handling

Portfolio Role and Combination Strategies

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