Introduction
The S&P 500 is a popular benchmark for investors. It has been around since 1957 and is an index of the 500 largest publicly traded companies in the US. When it comes to investing, many people choose to buy ETFs that track the S&P 500 in order to get access to a diversified portfolio of these large stocks. But which one should you buy? With so many different options out there, choosing the right one can be daunting. That’s why we’ve put together this blog post, which compares three of the largest S&P 500 tracking ETFs: SPY, IVV, and VOO. We’ll take a look at their history, performance, fees, and more so you can make an informed decision on which one is best for your portfolio.
VOO
VOO is Vanguard’s flagship S&P 500 ETF, and it is also the biggest ETF that tracks S&P 500 index, with market cap of 744.77B as of Feb 2, 2023. It tracks the index, which consists of 500 large-cap US stocks, and is a popular choice for investors looking to get exposure to the US stock market. The expense ratio is extremely low at 0.04%, and the fund is very well diversified, with over 3,000 holdings.
One key advantage of VOO is that it has a lower turnover than some other S&P 500 ETFs. This means that it is less likely to be impacted by short-term market fluctuations, and can provide a steadier investment return over time. Another key benefit is that Vanguard offers a wide range of investment products, so investors can easily add or rebalance their portfolios with other Vanguard funds.
SPY
The SPY ETF tracks the S&P 500 Index. The fund is a passively managed index fund, meaning that it does not actively trade stocks in an attempt to outperform the market. Instead, the fund simply attempts to replicate the performance of the index.
The SPY ETF is one of the oldest and largest ETFs in existence, with over $356 billion in assets under management. The fund has a low expense ratio of just 0.09%, making it one of the most cost-effective ways to track the S&P 500.
The SPY ETF is also one of the most liquid ETFs on the market, with an average daily trading volume of over 30 million shares. This means that investors can easily buy or sell shares of the fund without having to worry about large spreads or slippage.
IVV
The third largest S&P tracking ETF with Market cap of over $289 billion. The ETF is designed to provide broad market exposure and is rebalanced quarterly to maintain its tracking of the S&P 500 index.
Comparison
When it comes to performance, all three ETFs have been incredibly successful in tracking the S&P 500 index. Over the past five years, IVV has returned 13.59%, VOO has returned 13.57%, and SPY has returned 13.56%. All three funds have also had very similar volatility levels over this time period.
One thing to keep in mind when comparing these ETFs is that they all have different expense ratios. IVV’s expense ratio is 0.04%, while VOO’s expense ratio is 0.03%. SPY’s expense ratio is slightly higher at 0.09%.
Overall, all three of these ETFs are excellent choices for investors looking to track the S&P 500 index. They have all performed very similarly over the long-term and have similar expense ratios.
Conclusion
Investing in S&P 500 tracking ETFs can be a great way to diversify your portfolio without the hassle and cost of buying individual stocks. SPY, IVV and VOO are three of the largest ETFs that track the S&P 500 index, each offering investors different benefits. By comparing their various features such as expense ratios, commission fees and asset holdings you can find an ETF that meets your investment goals while helping you create a more diverse portfolio.
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