SPY vs VOO vs IVV: Major S&P 500 Index Funds Compared

SPY vs. VOO vs. IVV: a faceoff between three giant, widespread index funds, all monitoring the S&P 500. However what’s the distinction if all of them observe the identical index? And how are you going to resolve which is greatest for you?

Let’s begin with the fundamentals.

SPY vs VOO vs IVV: By the Numbers

* As of October. 2023

5-12 months Efficiency

SPY vs VOO vs IVV: Overview

All three observe the identical S&P 500 index, which consists of 500 of the biggest publicly traded corporations within the US. Meaning the three funds shall be holding basically the identical shares in the identical proportions. The one variations are within the particulars.

The S&P 500 index and the ETFs that observe them are market cap weighted. That signifies that they offer bigger corporations a heavier weight.

SPY is the biggest S&P 500 index, barely forward of the others in whole property beneath administration and each day buying and selling quantity in comparison with the opposite two mixed. It additionally has the biggest expense ratio, 3x greater than VOO and IVV.
VOO is by a small margin the S&P 500 ETF with the smallest quantity of property beneath administration and the smallest buying and selling quantity.
IVV Is similar to VOO however barely bigger in property and buying and selling quantity.

All three ETFs have an nearly similar publicity as they observe the identical index. The one distinction is that VOO and IVV include a couple of extra shares, as they’re licensed to solely partially observe the S&P 500 composition whereas making an attempt to copy the index, therefore the marginally greater variety of shares held.

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SPY vs VOO vs IVV: The Variations

As a result of they’re so related, it’s simple to get confused about which S&P 500 ETF to decide on.

The primary option to make is between SPY and VOO/IVV. It’s because SPY has a a lot greater expense ratio, greater than 3 instances greater. So why is SPY the biggest of the three if it prices extra to personal it?

It’s because the expense ratio solely tells a part of the story about an ETF’s prices. The expense ratio defines the prices you’ll pay whenever you personal the ETF. Nevertheless, the unfold (the distinction between shopping for and promoting worth) additionally impacts the precise price of proudly owning shares in an ETF.

SPY has probably the most liquidity and the bottom unfold, making it the favourite S&P 500 ETF for the biggest monetary establishments.

If you wish to purchase and maintain, you need the bottom expense ratio potential and can choose VOO or IVV. However for those who intend to commerce out and in of this place typically sufficient, you’ll in the end pay decrease charges with SPY.

The selection between VOO and IVV is harder. Each have the identical expense ratio, and the dividend yield solely differs by a microscopic 0.02%.

One issue might be a choice for one issuer over the opposite. Each Vanguard and Blackrock are giant and well-respected establishments.

Nevertheless, taking a long-term view (20+ years), it appears this distinction will not be getting larger over time. So it isn’t very prone to have an effect on the efficiency of your portfolio in precise apply.

Which Is Finest for You?

The very first thing to resolve is why you have an interest in shopping for an S&P 500 ETF.

There’s little or no distinction between IVV and VOO. However for those who fear concerning the slight however persistent low cost of VOO in comparison with the opposite 2 giant S&P 500 indexes, you may choose IVV. A choice for Vanguard vs Blackrock might additionally resolve for one in opposition to the opposite.

Irrespective of which you select, any of those ETFs offers you diversified publicity to the highest 500 publicly listed corporations within the US. In the event you intend to carry for a few years, decrease charges may make an actual distinction, particularly for those who maintain the ETF in a retirement account.

If you wish to diversify your S&P 500 ETF with different ETFs, you’ll have loads of choices. We’ve already checked out SPY vs QQQ, an SPX fund vs prime NASDAQ 100 fund, and VTI vs VOO, a significant SPX fund in opposition to a fund monitoring the CRSP U.S. Complete Market Index. Any of those funds will present broad, cheap publicity to the US markets.

Authorized Disclaimer

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