The Vanguard S&P 500 ETF (VOO), iShares Core S&P 500 ETF (IVV), and State Street SPDR S&P 500 ETF (SPY) dominate the ETF landscape, collectively managing $2.27 trillion. While they all track the same S&P 500 index, subtle differences in expense ratios and trading spreads can impact total cost of ownership, particularly for retail investors.
Both VOO and IVV boast low expense ratios of 0.03%, while SPY’s ratio stands at 0.09%. Despite this, SPY remains a favorite among institutional investors due to its high liquidity, trading at roughly ten times the daily dollar volume of its peers. For retail investors, however, the lower expense ratios of VOO and IVV may present a more cost-effective option, especially since all three ETFs have negligible trading spreads.
In summary, while all three ETFs offer similar performance, VOO and IVV provide a slight edge in cost efficiency for retail investors. For a deeper dive into these nuances, I recommend checking out the full article.
Source: fool.com