Investing in the S&P 500 is a tried-and-true strategy for anyone who wants long-term exposure to the U.S. equity market.
But with so many ETFs tracking the same index, how do you choose the right one?
Let’s walk through four of the most popular S&P 500 ETFs — SPY, VOO, IVV, and SPLG — and see how they compare.
They may look similar on the surface, but each brings something unique to the table.
🔍 SPY – The Pioneer with Massive Liquidity
- Launched in 1993 by State Street Global Advisors, SPY was the first-ever ETF listed in the U.S.
- It’s built for traders and institutions — with unmatched liquidity and volume.
- But that speed comes at a slight cost: it has the highest expense ratio (0.0945%) among the group.
- SPY also operates as a Unit Investment Trust, which means it doesn’t reinvest dividends automatically.
👉 If you care about fast execution and tight bid-ask spreads, SPY is hard to beat. But for long-term buy-and-hold? You have cheaper options.
💡 VOO – The Low-Cost Vanguard Favorite
- Launched in 2010, VOO is loved by long-term investors — and for good reason.
- With an expense ratio of just 0.03%, it offers incredible value.
- Managed by Vanguard, a firm known for its client-first philosophy and mutual ownership model.
👉 VOO may not trade as actively as SPY, but it delivers broad exposure with minimal drag. A go-to pick for retirement portfolios.
🔧 IVV – iShares’ Efficient Giant
- Introduced in 2000 by BlackRock’s iShares, IVV also charges a low 0.03% expense ratio.
- It’s often overlooked by casual investors, but widely used by institutions.
- Unlike SPY, it’s an open-ended ETF, which allows for more flexible dividend reinvestment and better tax treatment.
👉 Think of IVV as the “quiet professional” — efficient, reliable, and tax-smart.
💸 SPLG – The Underdog with Ultra-Low Fees
- Originally launched in 2005 and revamped in 2020 to track the S&P 500.
- At 0.02%, it has the lowest expense ratio in this group.
- And with a share price under $70, it’s extremely accessible for dollar-cost averaging and small account investors.
Yes, SPLG once tracked a different index — and some investors still bring that up.
But in recent years, it has settled firmly into its role as a true S&P 500 tracker — with growing volume and consistent performance.
👉 For those who prioritize cost-efficiency and flexibility, SPLG is a hidden gem. (It’s my personal favorite.)
🧾 Side-by-Side Comparison
See the chart above for a quick breakdown of key features like issuer, structure, expense ratio, and more.
Final Thoughts
Choosing the right S&P 500 ETF comes down to what matters most to you:
- Want speed and institutional-grade liquidity? 👉 SPY
- Want long-term value from a trusted brand? 👉 VOO
- Prefer subtle tax and reinvestment advantages? 👉 IVV
- Want to save every penny and keep it simple? 👉 SPLG
For me, SPLG checks all the boxes: low cost, growing scale, and pure efficiency.
In the long run, minimizing friction matters more than sticking with a big name — and that’s exactly why I choose it.
Up Next: What’s Inside QQQ?
In the next post, I’ll break down QQQ, the ETF that tracks the Nasdaq-100.
We’ll explore what makes it different, what’s inside it, and how it fits into a modern portfolio.
As always — we go step by step.
Thanks for reading — and as always, invest smart and stay consistent.
Step by step — that’s how we build something lasting. 🚀
Just to be clear — I’m not a financial advisor.
I’m simply sharing my personal investing journey here. Please do what feels right for you.
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