Broad market vs. concentrated growth
VOO vs QQQ
The most common comparison in passive investing: the entire US large-cap market against a narrower, tech-heavy slice of it. Below is what a decade of steady monthly contributions into each one actually produced, and why the gap is smaller than the headline numbers make it look.
#What this plan actually returned
These are real results, not estimates. We ran $10,000 up front plus $500 a month from September 9, 2016 to September 9, 2026 (10.0 years), with dividends reinvested, against actual daily closing prices for each fund.
| Ticker | Invested | Final value | Total return | Ann. return | Worst drop |
|---|---|---|---|---|---|
| VOO | $70,000 | $178,265 | +154.66% | +15.74% | -33.99% |
| QQQ | $70,000 | $241,123 | +244.46% | +20.67% | -35.12% |
Ann. return is the internal rate of return (IRR), which accounts for how long each individual contribution was invested, so it is lower than the headline total return on a plan that kept adding money. Worst drop is the deepest peak-to-trough decline in the fund itself during this window, measured on daily closes.
Figures current as of . Results change as markets move.
Pre-tax and excluding brokerage commissions. See How It Works for the full methodology, or re-run this exact comparison with your own numbers.
#Reading the result
QQQ finished the decade well ahead. On identical contributions, the difference in ending value is roughly $62,000, which sounds decisive until you notice what produced it: an annualized return gap of about five percentage points, compounded over ten years. Small annual differences become large dollar differences given enough time, which is the entire argument for caring about expense ratios and the entire risk of assuming a recent winner keeps winning.
It is worth being precise about what this window contains. The last ten years were an unusually good stretch for large-cap US technology: the post-2016 rally, a fast recovery from the 2020 crash, and the AI-driven surge from 2023 onward. QQQ is concentrated in exactly the companies that led all three. This backtest measures what happened, not what is likely to happen next.
#The drawdowns look identical and were nothing alike
The most interesting number in the table is the one that shows almost no difference. Both funds had a worst-case decline in the mid-thirties: about 34 percent for VOO and 35 percent for QQQ. On paper that suggests similar risk. The dates say otherwise.
- VOO’s worst drop ran from February 19 to March 23, 2020. That is 33 calendar days. It was violent, indiscriminate, and over almost before investors could react to it.
- QQQ’s worst drop ran from December 27, 2021 to November 3, 2022, a grind of more than ten months as interest rates rose and long-duration growth stocks repriced.
A drawdown you sit in for ten months is a different psychological experience from one that resolves in five weeks, even when the depth is the same. This is the part a single risk number cannot capture, and it is the reason to look at the shape of the chart rather than just the summary statistics.
#What you are actually choosing between
VOO(Vanguard S&P 500 ETF) holds roughly 500 of the largest US companies weighted by market capitalization, spanning technology, healthcare, financials, industrials, energy, and consumer sectors. It is about as close to “the US stock market” as a single ticker gets, at one of the lowest expense ratios available.
QQQ (Invesco QQQ Trust) tracks the Nasdaq-100: the largest non-financial companies listed on the Nasdaq exchange. By rule it holds no banks, insurers, or traditional financial firms at all. In practice it is dominated by a handful of mega-cap technology and communication-services names.
The real difference is not “S&P 500 versus Nasdaq,” it is how much of the fund rides on the same few outcomes. VOO is also cap-weighted, so its largest holdings carry real weight too, but the remaining weight is spread across hundreds of companies in unrelated industries. QQQ’s top holdings represent a much larger share of the fund, and many of them move on the same news: AI capital spending, chip demand, advertising budgets, and the interest-rate sensitivity that affects all long-duration growth stocks together.
#Dividends matter more for VOO than the gap suggests
This backtest reinvests dividends for both funds. That choice helps VOO more than QQQ, because VOO’s yield has generally been higher: broad-market exposure includes dividend-paying financials, energy, and consumer staples that the Nasdaq-100 largely excludes. Turn dividend reinvestment off and re-run it, and VOO’s result degrades by more than QQQ’s does.
If you want to understand why that compounding difference widens over longer horizons, what dividend reinvestment is really worth over 10+ years walks through the mechanism.
#What to test before drawing a conclusion
A single ten-year window is one sample. The questions worth answering are about consistency, not about which ticker won this particular decade.
- Run the same plan over five years, ten years, and twenty years. QQQ's advantage is not stable across all of them.
- Run a window that starts immediately before a downturn, such as January 2000 or October 2007, and see whether the ranking survives.
- Toggle dividend reinvestment off and watch which fund's result falls further.
- Compare the share of final value that came from your contributions versus market gains, not just the ending balance.
Change the contribution amount, schedule, or date range and re-run this comparison against the same historical data.
Open this in the calculator →