In the five years to September 2026, VOO returned 13.8% a year and QQQ returned 16.3%, dividends reinvested. QQQ is not a smaller version of the market. It holds the largest companies on one exchange, excludes financial companies by rule, and leans much harder into technology than VOO.
For a representative saver about twenty years from retirement, investing in a taxable account: In this situation, VOO and QQQ come out about even. Neither their known costs nor their last five years change the plan's success rate enough to matter.
With only the known costs — the same market for both funds, differing by fees and dividend tax — the money lasted in 98.7% of 10,000 simulated futures with VOO and 98.7% with QQQ. Using each fund's own returns from October 2021 to September 2026 instead, the figures were 98.4% and 98.8%. Both funds were run against the identical sequence of market shocks.
An exchange, not a market. The Nasdaq-100 is defined by where a company lists its shares, not by what it does. That leaves out banks and insurers entirely and concentrates the fund in the technology and communication companies that dominate the exchange.
The swings are part of the cost. QQQ has moved up and down more than VOO. In a plan that draws money out, bigger swings cost more than their average suggests: a fall early in retirement forces selling at low prices. Compare the two scenarios above to see how much of QQQ’s higher past return survives that.
VOO tracks the S&P 500 — it holds the 500 large US companies in the index, weighted by size. QQQ tracks the Nasdaq-100 Index — it holds the 100 largest non-financial companies listed on the Nasdaq exchange.
VOO charges 0.03% a year and yields 1.04%; QQQ charges 0.18% and yields 0.42%.
Returns and volatility are measured from monthly returns with dividends reinvested over 60 months — one sample from one market, and weak evidence for telling two broad funds apart, which is why the known-cost result is reported first. Dividends are taxed at 15% in a taxable account by default, the qualified rate most households pay; the page also shows the 0% and 20% brackets. It is the only tax modeled. A 3.8% net investment income tax can also apply to dividends once modified adjusted gross income passes $200,000 ($250,000 joint); it is not included. Retirement spending is held at 70% of income in today's dollars, and contributions exclude any employer match.
QQQ is a concentrated bet on a narrow group of large technology-led companies. The simulation shows what that bet does to a plan if its recent record continues, and what the known costs look like if it does not.
You can, but it would leave you without financial companies and most of the rest of the economy. Most people who hold QQQ hold it alongside a broad-market fund rather than instead of one.