Quick Answer
- VOO (0.03%), IVV (0.03%), and SPLG (0.02%) are interchangeable for buy-and-hold investing: same index, near-identical results.
- SPY (0.09%) costs roughly triple. Its advantages, the deepest liquidity and options market in the ETF world, matter to traders, not holders.
- The index holds about 500 large US companies, roughly 80% of US market value, selected by committee and weighted by size.
- The fee gap among the cheap three is about $1 per year per $10,000 invested. Between SPLG and SPY it's about $7.
- An S&P 500 fund is a complete US large-cap core. It is not the whole market and not a whole portfolio.
Four Tickers, One Index, a 4x Price Spread
| Fund | Issuer | Expense ratio | Cost per $10,000/yr | Built for |
|---|---|---|---|---|
| SPLG | State Street | 0.02% | $2 | Buy-and-hold, lowest sticker price |
| VOO | Vanguard | 0.03% | $3 | Buy-and-hold |
| IVV | iShares | 0.03% | $3 | Buy-and-hold |
| SPY | State Street | 0.09% | $9 | Trading, options, institutions |
That table is most of the decision. The rest of this guide explains why the funds cluster the way they do, what the index actually contains, and the structural quirk that keeps SPY both more expensive and more traded than the other three combined.
The Index: 500 Companies That Are 80% of the US Market
The S&P 500 holds roughly 500 of the largest US companies, selected by an S&P Dow Jones committee rather than a pure formula. Companies need consistent profitability and sufficient size and liquidity to get in, which is why the occasional giant waits years for admission. Because a few companies list two share classes, funds tracking the index hold slightly more tickers than 500; VOO's portfolio counts 505 stocks.
Weighting is by market value: the bigger the company, the bigger its slice. That makes the index self-updating (winners grow their weight, losers shrink away) and concentrated at the top; the ten largest companies represent roughly a third of the whole index. Together those 500 companies cover about 80% of the value of the entire US stock market, which is why one S&P 500 fund behaves so much like "the market" in practice. The other 20%, thousands of smaller companies, is the gap a total market fund fills; that trade-off is the subject of VOO vs VTI.
VOO, IVV, and SPLG Are Interchangeable. SPY Is the Odd One Out.
The three cheap funds differ by a single basis point of fee and essentially nothing else a long-term investor can detect. Same index, same rebalancing, tracking differences measured in hundredths of a percent that flip sign year to year. Choosing among them comes down to brokerage convenience, not analysis. This is a market that competition already won for you.
SPY is different in kind, not just in price. It launched in 1993 as the first US-listed ETF, and it carries its era's legal structure: a unit investment trust. That structure cannot reinvest dividends between quarterly distributions and cannot lend securities for incremental income, both small drags that modern fund structures avoid. What SPY offers instead is unmatched scale in trading: the deepest intraday volume and the most liquid options chain of any ETF in existence. For an investor holding shares for years, none of that is worth triple the fee. For someone trading size or writing options, SPY is the only game in town.
The market already sorted these funds: long-term money holds VOO, IVV, or SPLG, and trading desks use SPY. The tickers just don't advertise which club they belong to.
Fund by Fund
State Street's answer to losing buy-and-hold investors to Vanguard and iShares: the same index as its own SPY at less than a quarter of the price. Smaller and younger than VOO and IVV, with a low share price that mattered before fractional shares made it irrelevant. The cheapest way to own the S&P 500 in ETF form.
The default choice of the fee-conscious crowd and one of the largest funds on earth. Deep liquidity, tight tracking, and Vanguard's investor-owned structure behind it. If a Fidelity account is in the picture, the mutual-fund twin is covered in FXAIX vs VOO.
BlackRock's version, identical to VOO in every way an investor can measure. The pair trade so alike that the interesting question is a tax one: whether they count as "substantially identical" for wash sale purposes, which our wash sale guide takes on.
The first US ETF and still, on many days, the most traded security in the world. The UIT structure brings small drags (no dividend reinvestment between payouts, no securities lending), and the 0.09% fee is triple the modern alternatives. Its liquidity and options depth are the entire value proposition, and for its actual audience they're worth it.
Why SPY Still Dominates Trading at Triple the Cost
SPY's persistence looks irrational until you separate the two jobs an S&P 500 fund can do. Job one is holding: owning the market cheaply for years, where fees compound and liquidity beyond "can I sell today" is irrelevant. Job two is trading: moving millions in and out in seconds, hedging with options, arbitraging futures. Job two rewards liquidity above everything, and liquidity snowballs, because traders go where traders already are. Thirty years of that feedback loop built an options and futures ecosystem around SPY that no cheaper fund can replicate by cutting fees.
So the market split cleanly. Long-term money migrated to VOO, IVV, and SPLG; fast money stayed in SPY and pays 0.09% without noticing, because the fee difference on a two-day holding period rounds to zero. On a twenty-year horizon it's real money: our fee calculator puts numbers on exactly that gap.
One Fund Is a Complete Core. It Is Not a Complete Portfolio.
The strongest thing an S&P 500 fund gives you: 500 profitable large companies, self-updating, for nearly nothing. What it doesn't give you: small and mid-sized US companies (about 20% of the market), any international exposure, and any bonds. It also concentrates roughly a third of your money in its ten biggest names, which is the price of market-cap weighting when giants are giant.
None of that argues against holding one. It argues for knowing which job it's doing: the US large-cap engine of a portfolio, usually alongside international stocks and bonds. The classic way those pieces fit together is the 3-fund portfolio, and the total-market alternative is covered in VOO vs VTI. Past performance does not guarantee future results.
Common questions
VOO, IVV, and SPLG are functionally interchangeable for a buy-and-hold investor: same index, near-identical tracking, and fees of 0.03%, 0.03%, and 0.02% respectively. SPLG is the cheapest; VOO and IVV are the largest of the low-cost trio. SPY charges 0.09% and earns it only for active traders who use its unmatched options market and intraday liquidity. Which one suits you depends on your brokerage and preferences; the cost differences among the cheap three amount to about a dollar a year per $10,000. Past performance does not guarantee future results; this is education, not a recommendation.
Same index, different price and different structure. VOO charges 0.03%; SPY charges 0.09%, about three times as much, roughly $6 more per year on every $10,000. SPY is also organized as a unit investment trust, an older structure that cannot reinvest dividends between quarterly payouts or lend securities for extra income. SPY compensates with the deepest trading volume and options market of any ETF, which matters to institutions and traders and not at all to someone holding for a decade.
No. It holds roughly 500 large US companies chosen by a committee, which together represent about 80% of US market value. A total market fund like VTI adds thousands of smaller companies for the remaining 20%, and neither includes international stocks. The S&P 500 is a large-cap US fund: broad, but a deliberate subset.
Yes, quarterly, typically in late March, June, September, and December. The yield floats with the market, historically in the 1% to 2% range. For US funds like these, the dividends are almost entirely qualified, which means favorable tax rates in a taxable account. Exact payment dates are announced by each issuer every quarter.
You can, but there is no diversification benefit: VOO, IVV, SPLG, and SPY hold the same stocks in the same weights. Owning two of them is the same bet twice with extra statements. The main reason investors end up with two is accounts at different brokerages, which is harmless. One useful side effect: because the funds track the same index while being distinct securities, tax-loss harvesting between S&P 500 funds raises wash sale questions worth understanding first.
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