Three ETFs, one index
VOO, SPY, and IVV all track the S&P 500. They hold essentially the same 500 stocks in the same weights. The index performance is nearly identical. The differences come down to cost, liquidity, and fund structure.
SPY — the original
SPY launched in 1993 as the first US ETF. It has the highest trading volume of any ETF in the world, the tightest bid-ask spreads, and the deepest options market. Expense ratio: 0.0945%. Best for active traders and options strategies.
VOO — the low-cost leader
VOO charges just 0.03% per year. Vanguard's unique mutual ownership structure means profits go back to fund holders rather than external shareholders. Best for long-term buy-and-hold investors.
IVV — the iShares alternative
IVV also charges 0.03% and offers slightly higher daily trading volume than VOO. A solid alternative if your broker has an iShares commission-free promotion.
The expense ratio math
On a 100,000 USD portfolio, the expense ratio difference between SPY and VOO is roughly 65 USD per year. Over 20 years compounded at 8% annual growth, that difference adds up to well over 1,400 USD. On a 500,000 USD portfolio the gap exceeds 7,000 USD.
Who should own what
Active traders who use options: SPY, full stop. The liquidity and options ecosystem are unmatched. Everyone else: VOO or IVV. The cost savings compound significantly over any meaningful time horizon.
Track all three in real time with the free StockAdder Chrome extension — browse the full ETF hub for more comparisons.