Welcome to the age of the “finfluencer.” While some have genuine experience, many are focused on views, and not your best interest. At Hill Investment Group, we believe that real advice should be simple, clear, and grounded in evidence, not hype. That’s why we’re launching a new series to unpack misleading ideas that circulate online or in print.

Our goal? To inform, not entertain. To offer substance, not speculation.

Heard something at work, at golf, or on social media that has you asking, “Should I be paying attention to this?” Feel free to share it with us. We’d love to help unpack it. Submissions will remain confidential unless we get your permission to share anonymously. Send to: zenz@hillinvestmentgroup.com

Please note: Submissions are reviewed for educational purposes only and do not constitute personalized investment advice.

If you follow finance influencers online, you’ve probably seen a version of this pitch: “All you need are these ETFs.” More often than not, that list includes VOO and QQQ, and little else.

It’s a compelling idea. Over the past decade, these two funds have benefited from strong performance by large U.S. companies, particularly the tech sector. But a closer look at what’s under the hood reveals a more concentrated and potentially less diversified portfolio than many investors realize.

What These Funds Represent

VOO is an index fund tracking the S&P 500, which includes large U.S. companies. QQQ tracks the NASDAQ-100 Index, which also focuses on U.S. large-cap companies, particularly technology-oriented names. While they are separate funds, they share many holdings.

In fact:

• Roughly 85% of QQQ’s holdings also appear in VOO.
• The overlap in weight between the two strategies is around 50%.

That means holding both may result in doubling up on the same exposures, mainly large U.S. tech and growth-oriented companies.

Additionally, QQQ’s higher expense ratio reflects the licensing cost of tracking a proprietary index, as well as required marketing efforts. While high fees alone don’t negate a fund’s  merits, investors should always ask themselves if they can get similar investment exposures without the additional costs dragging down performance. 

What’s Not Included

Holding only VOO and QQQ may leave meaningful portions of the global capital markets untapped. These include:

• Small- and mid-cap U.S. companies
• International developed markets
• Emerging markets

Together, VOO and QQQ cover a significant portion of the U.S. market but only represent about half of the global investable opportunity set. Omitting the other half may reduce diversification and limit exposure to other potential sources of return.

For instance, in some years, areas outside the U.S., such as international stocks, have delivered notably stronger returns than their domestic counterparts. That rotation is unpredictable and has lasted over a decade when looking at historical returns.

A Broader Perspective on Diversification

Low-cost index funds can be valuable building blocks, but true diversification often means looking beyond the most visible names. A globally diversified portfolio typically includes exposure to companies of varying sizes, styles, and geographies. This broader approach is designed to manage risk and capture returns from multiple parts of the market, not just the ones making headlines.

The Takeaway

There’s nothing inherently wrong with VOO or QQQ. They offer relatively efficient access to major segments of the market. But using them as your only strategy may leave diversification and opportunity on the table. We know you can do better. An evidence-based investment approach typically considers a wider range of asset classes, grounded in long-term academic research rather than short-term trends.