PREF vs VOO
PREF vs VOO
Principal Spectrum Preferred Securities Active ETF vs Vanguard S&P 500 ETF
Quick Verdict
VOO has a lower expense ratio. VOO delivered stronger 1-year returns. VOO offers more diversification with 505 holdings.
Side-by-Side Comparison
| Metric | PREF | VOO | Winner |
|---|---|---|---|
| Expense Ratio | 0.55% | 0.03% | |
| AUM | $1.8B | $979.0B | |
| Dividend Yield | 5.13% | 1.09% | |
| Holdings | 153 | 509 | |
| YTD Return | +1.43% | +13.80% | |
| 1Y Return | +4.77% | +23.71% | |
| 3Y Return (annualized) | +8.16% | +21.50% | |
| 5Y Return (annualized) | +2.65% | +13.44% | |
| Volatility (annualized) | 7.8% | 14.1% | |
| Max Drawdown | -23.3% | -34.3% | |
| Fund Family | Principal Funds | Vanguard (US) | |
| Category | Allocation/Balanced | Equity | |
| Inception | Jul 10, 2017 | Sep 7, 2010 |
PREF vs VOO Performance
Principal Spectrum Preferred Securities Active ETF (PREF) is a ETF from Principal Funds and Vanguard S&P 500 ETF (VOO) is a ETF from Vanguard (US). Over the past year PREF returned +4.77% while VOO returned +23.71%. Year to date, PREF is up 1.43% versus a gain of 13.80% for VOO.
Over three years, PREF compounded at +8.16% per year against +21.50% for VOO; over five years the annualized figures are +2.65% and +13.44% respectively. Across the full 9-year window we track, VOO has the edge at +13.58% annualized vs +2.07%. Past performance does not guarantee future results.
Risk: Volatility and Drawdowns
VOO has been the more volatile fund, with annualized monthly volatility of 14.1% compared with 7.8% for PREF. Lower volatility generally means a smoother ride, though it often comes with lower long-run returns.
The deepest peak-to-trough decline in our data was -23.3% for PREF and -34.3% for VOO. Drawdown depth is worth weighing if you expect to sell during market stress rather than ride it out.
The two funds' monthly returns correlate at 0.73. They usually move together, but the gap leaves some room for diversification.
Fees and Cost Over Time
PREF charges 0.55% per year while VOO charges 0.03%. On a $10,000 position that is $55 vs $3 annually, a gap of $52 per year that compounds over a long holding period. On income, PREF currently yields 5.13% against 1.09% for VOO.
Holdings Overlap
Frequently Asked Questions
Which is cheaper, PREF or VOO?
PREF has an expense ratio of 0.55% while VOO charges 0.03%. VOO is the cheaper option. On a $10,000 investment, that is $52 per year of difference.
Which performed better, PREF or VOO?
Over the past year PREF returned +4.77% vs +23.71% for VOO, so VOO leads on 1-year performance. Over the longest common window we track (9 years), PREF annualized +2.07% vs +13.58% for VOO. Past performance does not guarantee future results.
Which is riskier, PREF or VOO?
VOO has been the more volatile fund at 14.1% annualized versus 7.8% for PREF. Worst drawdown: PREF -23.3% vs VOO -34.3%.
Should I hold both PREF and VOO?
PREF and VOO have a monthly-return correlation of 0.73, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between PREF and VOO?
PREF and VOO share 2 common holdings with a 0.2% weight overlap. Combined, they hold 616 unique securities.
Which pays a higher dividend, PREF or VOO?
PREF yields 5.13% while VOO yields 1.09%, so PREF currently pays the higher dividend yield.
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