S&P 500 ETFs to watch in 2022: VOO, SPY, and IVV

In this article we’ll look at:

It’s no surprise that investors like S&P 500 ETFs. Many people use them to gain diversified exposure to the US market. And unsurprisingly, they rank among the top traded ETFs.

S&P 500 ETFs track the S&P 500 index, which is considered to be a bellwether for the US economy. The index is made up of 500 of the largest US stocks and spans all industries such as technology, energy, financials, and healthcare. 

When you invest in a S&P 500 ETF, you automatically own top stocks like Apple, Tesla, Microsoft, and Disney, amongst other less-known names.

Top S&P 500 ETFs to watch in 2022

Given the popularity of the S&P 500 index and its historically consistent performance, there are many ETFs tracking it. The below table compares three different ETFs, ranked from highest net assets to lowest:  VOO, SPY, and IVV. 

NameTickerExpense Ratio
SPDR S&P 500 ETF TrustSPY0.09%
iShares Core S&P 500 ETFIVV0.03%
Vanguard S&P 500 ETFVOO0.03%

1. SPDR S&P 500 ETF Trust (SPY)

SPY is the oldest and probably the most well-known S&P 500 ETF. Launched in 1993, it’s offered by State Street Global Advisors. Because of its reputation, it’s traded a lot more frequently compared to VOO and IVV. SPY trades 85 million shares on average each day while VOO and IVV each trade less than 5 million.

Although this makes SPY more liquid, all three ETFs are so widely traded that the liquidity difference is immaterial for the average investor. The primary difference between SPY, VOO and IVV is cost. SPY has an expense ratio of 0.09% while VOO and IVV only cost 0.03%.

2. iShares Core S&P 500 ETF (IVV)

IVV is offered by iShares, part of the BlackRock family of funds. Like Vanguard and State Street Global Advisors, BlackRock is one of the world’s largest asset managers. 

With an expense ratio of 0.03%, IVV is identical in cost to VOO. 

3. Vanguard S&P 500 ETF (VOO)

VOO is offered by Vanguard, the brokerage firm founded by Jack Bogle, who’s considered by many to be the “father of index investing”. 

Vanguard is currently the world’s largest provider of index funds and they’re known for their very low fund fees. Indeed, VOO’s expense ratio is just 0.03%. In other words, your annual fee on a USD 10,000 investment in VOO is only USD 3!

Returns and dividends

Since VOO, SPY, and IVV track the same index and have nearly identical holdings, their performance is largely similar. In addition, all three ETFs distribute dividends from their underlying companies on a quarterly basis.

VOO vs. SPY vs. IVV: which to choose?

For most investors, the differences between the three ETFs are minor. They all track the same index, have similar holdings, and largely similar returns.

The main difference is the expense ratio. Both VOO and IVV are slightly cheaper at 0.03%. If you intend to buy and hold for the long term, the small difference in returns can add up. But if you’re an active trader, you might appreciate the higher liquidity of SPY.

Ultimately, VOO, SPY and IVV are all balanced options for an investor looking to gain exposure to the S&P 500 index. 

This article/webinar is brought to you by Syfe Australia Pty Ltd., CAR number 1295306 of Sanlam Private Wealth Pty Ltd (AFSL 337927). Disclaimer: Investing involves risk including the risk of losing your invested amount. We do not provide personalised advice or recommendations.  Any information we provide is general advice and current at the time  written. Please speak to your Financial or Tax adviser for personal advice. Any reference to an investment’s past or potential performance is not an indication of any specific outcome or profit. Data in article correct as of July 12, 2022.