📊 SPY vs VOO vs IVV · Three-Way S&P 500 ETF Comparison
SPY vs VOO vs IVV: Which S&P 500 ETF Should You Buy?
All three hold the same 503 stocks. The only real differences are cost, structure, and who should own each. SPY's fee is three times higher than VOO and IVV.
💰 Cost: 0.03% to 0.0945%
📊 Same 503 holdings
🔄 Same S&P 500 index
SPY vs VOO vs IVV: Side-by-Side
|
SPY |
VOO Best for most |
IVV |
| Full name | SPDR S&P 500 ETF Trust | Vanguard S&P 500 ETF | iShares Core S&P 500 ETF |
| Issuer | State Street | Vanguard | iShares |
| Expense ratio |
0.09% |
0.03% |
0.03% |
| AUM |
$630B |
$600B |
$590B |
| Holdings | 503 stocks | 503 stocks | 503 stocks |
| Structure | Unit Investment Trust | Open-End Fund | Open-End Fund |
| Inception | 1993 | 2010 | 2000 |
| Dividend reinvestment | Cash held, reinvested quarterly | Reinvested daily | Reinvested daily |
| Options market | Deepest in the world | Available, less liquid | Available, less liquid |
| 1-year return |
+24.6% |
+24.7% |
+24.7% |
| 5-year return |
+15.7% |
+15.9% |
+15.9% |
Returns approximate. Past performance does not guarantee future results.
The BFF Take
VOO or IVV for almost everyone. Both cost 0.03% and hold the same 503 stocks in the same market-cap proportions. On $100,000 invested for 20 years at 10% average returns, the 0.0645% fee gap between SPY and VOO/IVV compounds to roughly $12,000 in lost returns. That is the entire cost difference in concrete dollars. SPY earns its 0.0945% fee for one specific use case: options trading. SPY's options market is the most liquid in the world. Active options traders, institutional desks, and anyone writing covered calls or buying puts benefits from SPY's uniquely tight spreads and deep open interest. For everyone else — buy-and-hold retirement investors, 401k rollovers, regular brokerage accounts — VOO and IVV are the right answer. Between VOO and IVV, the choice comes down to your brokerage. Vanguard customers default to VOO. Everyone else can choose either; both are equally good. IVV launched in 2000 (ten years before VOO) and has a longer track record, but that does not make it better. IVV's open-end fund structure also allows it to lend securities, generating small revenue offsets to its fee. The practical difference between VOO and IVV is near zero.
Who Each Fund Is Built For
SPY
Best for
- Options traders (deepest options market)
- Institutional investors trading large blocks
- Short-term tactical S&P 500 exposure
- Anyone who needs maximum intraday liquidity
VOO
Best for
- Vanguard brokerage account holders
- Long-term buy-and-hold investors
- IRAs and 401k rollovers
- Anyone who wants the lowest possible cost
IVV
Best for
- Fidelity and other non-Vanguard brokerage users
- Long-term buy-and-hold investors
- Investors who prefer iShares products
- Longer inception history (2000 vs 2010)
Frequently Asked Questions
Should I buy SPY, VOO, or IVV?
For long-term buy-and-hold investors: VOO or IVV. Both cost 0.03% — one-third of SPY's 0.0945%. On $100,000 compounded at 10% for 20 years, the fee difference costs roughly $12,000 in foregone returns. SPY's higher fee is justified only for options traders, where its options market is the most liquid in the world. For retirement accounts, regular brokerage investing, or any buy-and-hold strategy, VOO or IVV is the right choice.
Is there a performance difference between SPY, VOO, and IVV?
Minimal. All three track the S&P 500 and hold identical stocks in identical proportions. The small performance gap is explained almost entirely by the fee difference. Over 10 years, VOO and IVV have slightly outperformed SPY by roughly 0.06% per year — exactly matching the expense ratio difference. There is no alpha, no index difference, and no construction difference that creates return variation beyond fees. Past performance does not guarantee future results.
Why does SPY cost so much more than VOO and IVV?
SPY was created in 1993 as a Unit Investment Trust (UIT) — a legal structure that was the only option available for ETFs at the time. This structure cannot reinvest dividends or lend securities, which limits fee-reduction mechanisms. Vanguard and iShares created their funds decades later as open-end mutual funds, which are more efficient structures. State Street could lower SPY's fee, but doing so would reduce revenue from an extremely profitable product — institutional and retail traders pay the 0.0945% because SPY's liquidity is worth it to them.
Does SPY reinvest dividends?
Not automatically. SPY holds dividends in cash until its quarterly distribution date, then distributes them as cash to shareholders. This cash drag slightly reduces SPY's returns relative to VOO and IVV, which reinvest dividends on a daily basis. In a rising market, dividends held as cash rather than reinvested immediately underperform. This is a structural disadvantage of SPY's Unit Investment Trust structure and contributes to its long-term underperformance relative to VOO and IVV on an after-fee basis.
Can I switch from SPY to VOO or IVV?
Yes, but consider taxes first. In a taxable brokerage account, selling SPY triggers capital gains tax on any appreciation since you bought it. If SPY has risen significantly since your purchase, the tax bill may outweigh years of fee savings from switching. In a tax-advantaged account (IRA, 401k), switching is free — you can sell SPY and buy VOO or IVV with no tax consequences. For taxable accounts, a practical approach: stop buying SPY and direct all new contributions to VOO or IVV, letting the existing SPY position run. This avoids triggering taxes while capturing the fee savings going forward.
Past performance does not guarantee future results. Fund data is approximate and may not reflect current holdings or returns. Nothing on ETF BFF is personalized financial advice. ETF BFF may receive compensation from brokerage partners referenced on this site.