Table of Contents
Table of Contents
Why Expense Ratios Matter
IVV, VOO, and SPLG offer the lowest fees, while SPY is the most liquid
By
:max_bytes(150000):strip_icc()/reiff_headshot-5bfc2a60c9e77c00519a70bd.jpg "Top S&P 500 ETF (1)")
Nathan Reiff has been writing expert articles and news about financial topics such as investing and trading, cryptocurrency, ETFs, and alternative investments on Investopedia since 2016.
Learn about our editorial policies
Updated June 18, 2023
:max_bytes(150000):strip_icc()/GettyImages-1387481089-32ccd6a802a6483793f20a77d8e0b19e.jpg "Top S&P 500 ETF (2)")
Trending Videos
The S&P 500 Index entered a bull market on June 8 after rebounding 20% from its October 2022 lows. For investors confident the market will continue its winning streak, these four ETFs offer exposure to one of the U.S. stock market's most closely followed benchmarks.
iShares Core S&P 500 ETF, Vanguard S&P 500 ETF, and SPDR Portfolio S&P 500 are tailored for investors seeking the lowest expense ratios. The SPDR S&P 500 ETF is best for investors and active traders who want the most liquidity.
Key Takeaways
- The S&P 500 Index broke into bull market territory in early June after falling 25% from record highs reached in December 2021.
- iShares Core S&P 500 ETF, Vanguard S&P 500 ETF, SPDR Portfolio S&P 500, and SPDR S&P 500 ETF give investors exposure to the index.
- When selecting an S&P 500 ETF, investors should consider the fees they'll pay and the liquidity of each fund.
- Apple Inc. (AAPL) is the largest company in the S&P 500, and thus the top holding of each of these funds.
Investors have been encouraged by falling inflation and the Federal Reserve's decision to pause rate hikes at its June meeting. The 12-month trailing price-earnings ratio of the S&P 500 has fallen by 11% in the past year, making many of these stocks cheaper.
Below we take a closer look at four S&P 500 ETFs. We have excluded leveraged ETFs, which provide outsized returns but come with extra risk. All data below are as of June 14.
S&P 500 ETF With the Lowest Fees: iShares Core S&P 500 ETF (IVV) (Tie)
- Expense Ratio: 0.03%
- Performance Over One-Year: 15.4%
- Annual Dividend Yield: 1.56%
- 30-Day Average Daily Volume: 3,668,396
- Assets Under Management: $326.1 billion
- Inception Date: May 15, 2000
- Issuer: BlackRock Financial Management
S&P 500 ETF With the Lowest Fees: Vanguard S&P 500 ETF (VOO) (Tie)
- Expense Ratio: 0.03%
- Performance Over One-Year: 15.3%
- Annual Dividend Yield: 1.57%
- 30-Day Average Daily Volume: 3,590,357
- Assets Under Management: $312.6 billion
- Inception Date: Sept. 7, 2010
- Issuer: Vanguard
S&P 500 ETF With the Lowest Fees: SPDR Portfolio S&P 500 ETF (SPLG) (Tie)
- Expense Ratio: 0.03%
- Performance Over One-Year: 15.3%
- Annual Dividend Yield: 1.59%
- 30-Day Average Daily Volume: 3,191,321
- Assets Under Management: $18.3 billion
- Inception Date: Nov. 8, 2005
- Issuer: State Street Global Advisors
Most Liquid S&P 500 ETF: SPDR S&P 500 ETF (SPY)
Liquidity indicates how easy it is to buy or sell an ETF, with higher liquidity generally translating to lower trading costs. While trading costs aren't a concern for investors holding ETFs long term, active traders favor highly liquid funds to minimize costs.
- Expense Ratio: 0.0945%
- Performance Over One-Year: 15.3%
- Annual Dividend Yield: 1.60%
- 30-Day Average Daily Volume: 80,884,133
- Assets Under Management: $413 billion
- Inception Date: Jan. 22, 1993
- Issuer: State Street Global Advisors
Why Expense Ratios Matter
Because these ETFs follow the performance of the S&P 500 index, one of the most important determinants of long-term returns is how much a fund charges in fees. An ETF's fees are measured by its expense ratio, which is the percentage of an investor's assets that are kept by the fund manager to maintain the fund.
A fund's expense ratio can significantly impact a long-term investor's total returns. An investor who puts $10,000 in a fund that returns 10% every year will pay $336 in fees to a fund with a 0.5% expense ratio. The same investor would pay $1,682 in fees if they put the same money in a fund with a 2.5% expense ratio.
The comments, opinions, and analyses expressed on Investopedia are for informational purposes online. Read ourwarranty and liability disclaimerfor more info.
As of the date this article was written, the author does not own any of the above ETFs.
Article Sources
Investopedia requires writers to use primary sources to support their work. These include white papers, government data, original reporting, and interviews with industry experts. We also reference original research from other reputable publishers where appropriate. You can learn more about the standards we follow in producing accurate, unbiased content in oureditorial policy.
Yahoo! Finance. "S&P 500 Index."
Wall Street Journal. "S&P 500 P/E Ratio."
iShares by BlackRock. "iShares Core S&P 500 ETF (IVV)."
Vanguard. "Vanguard S&P 500 ETF (VOO)."
State Street Global Advisors. "SPDR Portfolio S&P 500 ETF (SPLG)."
Etf.com "SPDR S&P 500 ETF Trust (SPY)."
Compare Accounts
×
The offers that appear in this table are from partnerships from which Investopedia receives compensation. This compensation may impact how and where listings appear. Investopedia does not include all offers available in the marketplace.
Provider
Name
Description
