The question
Two funds keep coming up. How do I compare them without just picking the one with the bigger recent number?
The idea
- A fair comparison asks four questions, in this order:Do they hold the same thing? If not, you are choosing what to own, not which fund is better.Same window? Compare returns over exactly the same dates, and look at more than one window.Return next to risk. A bigger return usually came with bigger swings and deeper falls.Cost. The fee, in dollars a year.
- No single number settles it. The facts together tell you what each fund is.
Worked example
Both are index funds (lesson 3). QQQ tracks the Nasdaq-100, about 100 large companies listed on the Nasdaq exchange. VOO tracks the S&P 500. Facts from ETFIQ's QQQ vs VOO page, as of Nov 10, 2026.
1. What they hold. QQQ holds 103 companies, VOO 505. QQQ's top 10 are 46.6% of the fund, VOO's 39.1%. Their overlap by weight (lesson 2) is 55%: related, but not the same fund.
2. Two windows, two stories. On $10,000:
| Window | QQQ | VOO |
|---|---|---|
| Year to Nov 10, 2026 | +8.77%: $10,877 | +11.34%: $11,134 |
| Sep 17, 2010 to Nov 6, 2026 | +1,467.9%: $156,790 | +774.7%: $87,470 |
For the long window: $10,000 × (1 + 14.6790) = $156,790, and $10,000 × (1 + 7.7470) = $87,470. Over the last year VOO led by 2.57 points. Over 16 years QQQ led by a wide margin. Neither window is "the truth"; each is a fact about its dates.
3. Risk next to return. Over the same 16 years:
- Volatility (how much weekly returns swing, scaled to a year): QQQ 19.0%, VOO 15.9%
- Worst fall (lesson 1): QQQ −35.1%, VOO −31.8%
QQQ's higher return came with bigger swings.
4. Cost. QQQ's fee is 0.18%, VOO's 0.03%. On $10,000: $18 a year against $3.
Now the easy case. SPY and VOO both track the S&P 500, so step 1 is settled: same holdings. Cost and tracking decide. SPY charges 0.09% to VOO's 0.03%. From Sep 17, 2010 to Nov 6, 2026, SPY returned +766.3% and VOO +774.7%: on $10,000, $86,630 against $87,470, a gap of $840, in line with VOO's lower fee.
The common mistake
"The one that went up more is the better fund." That reads one window as a verdict. Over the year to Nov 10, 2026 VOO "won"; over 16 years QQQ did, with bigger swings. Both are true. Comparing well means stating the window every time and putting risk beside return.
A second mistake is treating different funds as copies. QQQ is not a costly VOO; it is a different list.
Check your understanding
Pick an answer to see why. Two of three right passes the lesson.
1. Two funds track the same index. One charges 0.20%, the other 0.05%. Over five years their returns differ by about 0.15 points a year. What explains it best?Answer: B. The fee gap. Same index means same holdings, and 0.20 − 0.05 = 0.15 points a year. Not A: index funds copy a list; there is no stock picking.2. Fund X returned 25% last year, fund Y 12%. What should you check before calling X better?Answer: B. Whether they hold the same thing, other windows, and their risk. One window can flip, and a higher return often came with bigger swings. Not C: fees matter, but they are one fact of four.3. Over the year to Nov 10, 2026 VOO beat QQQ; over 16 years QQQ beat VOO. Which statement is true?Answer: C. Each result is a fact about its own window. Returns depend on start and end dates, so both are true. Not B: the long window is one fact, and it came with deeper falls.
Takeaways
- Start with what each fund holds: different holdings means a different job, not a better fund.
- Always compare the same dates, and look at more than one window.
- Put volatility and worst fall beside every return, and the fee in dollars beside both.