SPY, VOO and IVV track the same 500 companies in the same proportions, and over any long stretch their returns land within a few hundredths of a percent of each other. That is the whole point of an index fund, and it is why the question "which S&P 500 ETF should I buy" feels unanswerable: the answer seems to be any of them.
It nearly is. But the three funds are not identical, and the ways they differ are worth knowing before you put a decade of savings into one: SPY costs three times as much to hold, is built on a 1993 legal structure that handles dividends less efficiently, and in exchange is the most traded security on earth. VOO and IVV are cheaper, structurally more modern, and just as good at the one job that matters — owning the index. This guide puts numbers on each difference, so you can see which ones are large enough to care about and which are rounding errors.
Short version: if you buy and hold, VOO or IVV; if you trade or use options, SPY; and if you are choosing between VOO and IVV, flip a coin or pick the one your broker already holds. The expense gap is small in percent and real in dollars over thirty years; nothing else in the comparison moves the needle for a long-term investor.
Three funds at a glanceSame index, three sponsors
Sponsor
- SPY
- State Street (SPDR)
- VOO
- Vanguard
- IVV
- BlackRock (iShares)
Launched
- SPY
- January 1993
- VOO
- September 2010
- IVV
- May 2000
Expense ratio
- SPY
- 0.0945%
- VOO
- 0.03%
- IVV
- 0.03%
Cost per $10,000 a year
- SPY
- $9.45
- VOO
- $3.00
- IVV
- $3.00
Legal structure
- SPY
- Unit investment trust
- VOO
- Open-end fund
- IVV
- Open-end fund
Assets
- SPY
- ≈ $781B
- VOO
- ≈ $999B
- IVV
- ≈ $888B
Dividend yield
- SPY
- 0.99%
- VOO
- 1.05%
- IVV
- 1.08%
10-year return, annualised
- SPY
- 15.36%
- VOO
- 15.44%
- IVV
- 15.40%
| Metric | SPY | VOO | IVV |
|---|---|---|---|
| Sponsor | State Street (SPDR) | Vanguard | BlackRock (iShares) |
| Launched | January 1993 | September 2010 | May 2000 |
| Expense ratio | 0.0945% | 0.03% | 0.03% |
| Cost per $10,000 a year | $9.45 | $3.00 | $3.00 |
| Legal structure | Unit investment trust | Open-end fund | Open-end fund |
| Assets | ≈ $781B | ≈ $999B | ≈ $888B |
| Dividend yield | 0.99% | 1.05% | 1.08% |
| 10-year return, annualised | 15.36% | 15.44% | 15.40% |
Source: CalculatorAI · calculatorai.app · State Street, Vanguard, iShares; ChartRow S&P 500 ETF data, 2026-09-17
Read the last row first. Over ten years the three funds differ by eight hundredths of a percent a year — VOO ahead of SPY by 8 basis points, IVV by 4. That is the entire performance difference between the most and least expensive way to own the S&P 500, and the rest of this article is about where those hundredths come from.
The expense ratioSmall in percent, real in dollars
SPY charges 0.0945% a year; VOO and IVV charge 0.03%. On $10,000 that is $9.45 against $3.00 — the difference of a sandwich. The reason anyone writes about it is that the fee is taken every year from a balance that is supposed to grow, so the gap compounds along with everything else.
$10,000 for 10 years
- SPY 0.0945%
- $19,486
- VOO / IVV 0.03%
- $19,613
- SPY costs you
- $126
- SPYM 0.02%
- $19,632
$10,000 for 30 years
- SPY 0.0945%
- $73,995
- VOO / IVV 0.03%
- $75,441
- SPY costs you
- $1,446
- SPYM 0.02%
- $75,667
$100,000 for 10 years
- SPY 0.0945%
- $194,865
- VOO / IVV 0.03%
- $196,126
- SPY costs you
- $1,261
- SPYM 0.02%
- $196,322
$100,000 for 20 years
- SPY 0.0945%
- $379,723
- VOO / IVV 0.03%
- $384,654
- SPY costs you
- $4,930
- SPYM 0.02%
- $385,424
$100,000 for 30 years
- SPY 0.0945%
- $739,947
- VOO / IVV 0.03%
- $754,405
- SPY costs you
- $14,458
- SPYM 0.02%
- $756,672
$500 a month for 30 years
- SPY 0.0945%
- $573,949
- VOO / IVV 0.03%
- $581,280
- SPY costs you
- $7,331
- SPYM 0.02%
- $582,426
| Scenario | SPY 0.0945% | VOO / IVV 0.03% | SPY costs you | SPYM 0.02% |
|---|---|---|---|---|
| $10,000 for 10 years | $19,486 | $19,613 | $126 | $19,632 |
| $10,000 for 30 years | $73,995 | $75,441 | $1,446 | $75,667 |
| $100,000 for 10 years | $194,865 | $196,126 | $1,261 | $196,322 |
| $100,000 for 20 years | $379,723 | $384,654 | $4,930 | $385,424 |
| $100,000 for 30 years | $739,947 | $754,405 | $14,458 | $756,672 |
| $500 a month for 30 years | $573,949 | $581,280 | $7,331 | $582,426 |
Source: CalculatorAI · calculatorai.app · drafts/spy-vs-voo-vs-ivv-numbers.mjs
So the honest framing is: on a $100,000 holding kept for thirty years, SPY's fee costs about $14,500 more than VOO's — around 2% of the final balance. At the long-run nominal return of 10% rather than 7%, the same gap is $33,000, because a larger balance pays a larger fee. Neither number is life-changing against a $750,000 outcome; both are more than anyone would knowingly pay for nothing. You can run your own balance and horizon through the Compound Interest Calculator — enter the gross return minus each fund's expense ratio and compare the two ending balances.
The structureWhy SPY handles dividends worse
SPY was the first U.S. ETF, launched in January 1993, and it was built as a unit investment trust — a legal wrapper with rules from before ETFs existed. VOO and IVV are ordinary open-end funds. For a buy-and-hold investor the distinction has one practical consequence.
Dividends wait in cash
A UIT must hold the dividends it receives as cash until the quarterly distribution date; it cannot reinvest them in the index in the meantime. It also cannot lend out its securities for fee income. In a rising market, cash that is not invested is a small drag every quarter.
Dividends stay invested
An open-end fund can reinvest dividends as they arrive and pay them out at the quarter's end, so the money is never sitting idle. Both funds also lend securities and return most of the income to the fund, which nudges tracking slightly above the index.
How big is the dividend drag? The S&P 500 yields about 1% today; dividends accrue for roughly 45 days on average before a quarterly payout; and the market has returned about 10% a year over long periods. Multiply those together and the cash drag is around 0.013% a year — about 1.3 basis points. Add the 6.45-basis-point fee gap and you get about 7.7 basis points of expected underperformance for SPY — which is almost exactly the 8 basis points a year that VOO has actually beaten it by over the last decade. The structure explains the gap; it does not add a hidden one.
Liquidity and optionsThe one thing SPY does better
SPY is the most heavily traded security in the world, and its options market is deeper than any other ETF's by a wide margin. That matters for exactly two kinds of investor.
Traders who move in and out
SPY's bid-ask spread is typically one cent on a share price above $700 — about 0.13 basis points per side. VOO and IVV are also extremely liquid, but a large or fast order fills more cleanly in SPY. For a buy-and-hold investor placing a few orders a year, the difference is invisible: a year of SPY's extra fee equals roughly fifty of those spreads.
Options users
Covered calls, protective puts and spreads on the S&P 500 are cheaper and more flexible on SPY because the contract volume is there at every strike and expiry. If your strategy involves options on the index itself, SPY's fee is the price of that market and it is usually worth paying.
Everyone else
If you buy monthly and sell in retirement, you are paying for liquidity you will never use. VOO and IVV settle exactly as reliably; the extra 6.45 basis points a year buys nothing you touch.
VOO vs IVVThe tie
At the same 0.03% fee, the same open-end structure and the same index, VOO and IVV are as close to interchangeable as two funds get. Their ten-year returns differ by four hundredths of a percent, which is tracking noise. The tie-breakers are practical rather than financial:
Which one your brokerage favours
Vanguard accounts trade VOO free and automatically reinvest it; many other brokers do the same with either fund. Fractional-share support and automatic dividend reinvestment matter more than the ticker.
Which one you already own
Holding both is duplication, not diversification — the same 500 companies twice. If you have one, add to it. Our portfolio tracker guide covers spotting overlap like this.
Share price, if you cannot buy fractions
SPY, VOO and IVV all trade at several hundred dollars a share; SPYM trades near $80. If your broker sells whole shares only, the cheaper unit lets a monthly contribution go fully to work.
Tax lots you would rather not disturb
Switching from SPY to VOO in a taxable account realises gains. On a large old position the tax bill can exceed decades of the fee difference — the switch is for new money, or for tax-advantaged accounts.
What this comparison does not decideThe index is the choice
Everything above is a comparison of wrappers. The decision with actual consequences is the one you made before opening this page: to own the S&P 500 at all, rather than the total U.S. market, a global index, or an actively managed alternative. Our VOO vs VTI comparison covers the first of those choices — the 3,000 smaller companies VTI adds and how little they change the result — and the diversification explainer covers why a single S&P 500 fund is already more diversified than most stock portfolios. Whether the wrapper is SPY, VOO or IVV changes your outcome by hundredths of a percent; whether the wrapper holds the right thing changes it by whole percentages.
Where these numbers come from
Expense ratios are the sponsors' published figures (State Street 0.0945% for SPY and 0.02% for SPYM; Vanguard 0.03% for VOO; iShares 0.03% for IVV). Assets, yields and annualised returns are from ChartRow's S&P 500 ETF comparison dated September 17, 2026, and will drift daily; they are quoted to show scale, not as a forecast. The fee-drag table is arithmetic in drafts/spy-vs-voo-vs-ivv-numbers.mjs: an identical gross return before fees, compounded monthly, with each fund's expense ratio deducted monthly — so every dollar of difference is the fee and nothing else. The 7% gross assumption is conservative for U.S. stocks; the 10% case is shown for the $100,000 lump sum. The dividend cash-drag estimate multiplies yield (1.05%), the average accrual period before a quarterly payout (45 days) and an expected return (10%); it is an order-of-magnitude estimate, not a measurement, and it is consistent with the realised ten-year gap. Bid-ask spreads and options depth are described qualitatively; no spread was measured. Nothing here is a recommendation to buy or sell a security.
Frequently asked questions
Is VOO better than SPY? For a long-term holder, yes, by a small and predictable margin: VOO charges 0.03% against SPY's 0.0945%, reinvests dividends more efficiently, and has returned about 0.08% a year more over the past decade as a result. For an options trader, SPY's far deeper contract market can be worth more than that fee.
Is IVV the same as VOO? Functionally, yes. Same index, same 0.03% fee, same open-end structure; their ten-year returns differ by 0.04% a year. Choose by your broker's fractional-share and dividend-reinvestment support, or by whichever you already hold.
How much does SPY's higher fee actually cost? About $6.45 a year per $10,000 more than VOO or IVV. Compounded on a $100,000 holding at 7% gross for 30 years, that is roughly $14,500 less in the end — about 2% of the final balance.
Why does SPY cost more if it tracks the same index? Because its buyers are different. SPY is the most liquid security in the world and the centre of the S&P 500 options market; traders pay its fee for that liquidity. State Street sells the same index to savers through SPYM at 0.02%.
Should I sell SPY and buy VOO? In a tax-advantaged account, switching is free and sensible. In a taxable account, selling a long-held position realises capital gains that can exceed decades of fee savings — direct new contributions to the cheaper fund instead, and run the sale through the Capital Gains Calculator before touching the old lots.
