An ETF is an exchange-traded fund. It is like a mutual fund, but it is traded like a stock. Mutual funds are traded at the end of the day, and an ETF will be traded during the day as if it was a stock.
These two ETFs track the S&P 500 Index. They are comprised of the 500 largest companies in the U.S.A. These two ETFs have some of the most oversized market caps around, and they give you the ability to create an effective investing strategy.
SPY: SPDR S&P 500 Trust Overview:Looking at SPY, it is one of the oldest ETFs out there. This is the ETF most people will think about when they hear the word ETF. SPY was created by State Street in 1993. Therefore it holds as one of the most known and most liquid ETFs on the market.
Vanguard created VOO as an ETF to VFIAX. Its inception was in 2010 and has averaged about 16.51% per year for the last ten years. The expense ratio is 0.03%, making it one of the cheapest ETFs on the market, bringing savings to your pockets.