SPY, IVV and VOO: Be careful – not all S&P 500 ETFs are the same
Many ETFs aim to mirror the performance of the S&P 500, giving traders and investors exposure to the same broad market benchmark. Yet not all S&P 500 ETFs operate in the same way. Subtle differences in structure, costs and liquidity can influence how each fund performs in practice.
The SPDR S&P 500 ETF Trust (SPY), the iShares Core S&P 500 ETF (IVV) and the Vanguard S&P 500 ETF (VOO) all track the same benchmark index – the S&P 500 – which represents 500 of the largest publicly traded US companies.
They are all physically backed, meaning each holds the underlying shares rather than using derivatives to mirror the index. Yet, even though they appear similar, differences in cost, liquidity and structure make them suited to different purposes.
Trading versus investing – using the right tool for the job
It’s useful to distinguish between trading and investing:
- Trading involves short-term speculation – buying or selling over minutes, hours or days to capture price movements.
- Investing is long-term, aiming to build wealth steadily over years or decades.
Certain financial instruments are designed for trading rather than investing. Leveraged ETFs, for example, amplify daily price movements through derivatives and can lose value if held over extended periods due to compounding and time decay. Likewise, some products are useful for hedging or tactical exposure but are less suitable for long-term portfolios because of structural drag or higher ongoing costs.*
Even among unleveraged ETFs, design and purpose differ. Liquidity, expense ratio and fund structure (for instance, a trust versus an open-ended fund) all influence suitability. The S&P 500 ETFs demonstrate how products tracking the same index can serve different objectives.
*Leverage amplifies profits and losses.
What are SPY, IVV and VOO?
SPDR S&P 500 ETF Trust (SPY)
SPDR S&P 500 ETF Trust (SPY), launched in 1993, is the oldest and most actively traded ETF in the world. It helped pioneer passive investing and remains the go-to vehicle for institutions, hedge funds and active traders.
Its expense ratio is 0.0945%, higher than those of IVV and VOO. However, its exceptional liquidity helps offset this cost through tighter bid–ask spreads and minimal execution slippage. For those trading frequently, lower transaction costs often outweigh slightly higher annual fees.
SPY also benefits from the deepest options market of any ETF, making it integral to hedging and volatility strategies.
SPY price performance (2023–2025)
Between November 2023 and November 2025, SPY rose from around US $455 to about US $673, a gain of roughly 48%, reflecting the broader S&P 500 movement during that period.
It experienced fluctuations, with a low near US $470 in early 2024 amid inflationary concerns, and a peak above US $685 in October 2025 before stabilising close to US $672 by mid-November.
Past performance is not a reliable indicator of future results.
iShares Core S&P 500 ETF (IVV)
iShares Core S&P 500 ETF (IVV), launched by BlackRock’s iShares in 2000, tracks the same S&P 500 index but uses an open-ended fund structure, allowing it to reinvest dividends internally and operate more tax efficiently than SPY’s unit investment trust format.
Its expense ratio is 0.03%, among the lowest in the industry. Over time, this small difference can compound to deliver meaningful savings, making IVV cost-effective for pension funds, institutional investors and long-term portfolios.
While its liquidity is lower than SPY’s, daily trading volumes typically exceed US $1–2 billion, sufficient for most investors. Its tracking error has historically been slightly lower than SPY’s, reflecting efficient management and dividend reinvestment.
IVV price performance (2023–2025)
IVV rose from around US $475 in late 2023 to about US $676 by November 2025, an increase of more than 42%.
It closely mirrored both SPY and the S&P 500 index. Throughout 2024, it ranged between US $460 and US $605, influenced by monetary tightening and robust corporate earnings.
In 2025, IVV gained momentum, reaching US $694 in late October before consolidating to US $676 by 17 November 2025.
Because IVV reinvests dividends, its total return (including dividends) typically edges slightly higher than SPY’s, reinforcing its suitability as a long-term compounding vehicle.
Past performance is not a reliable indicator of future results.
Vanguard S&P 500 ETF (VOO)
Vanguard S&P 500 ETF (VOO), launched in 2010, is designed for long-term investors seeking simplicity and cost-efficiency. It also tracks the S&P 500 physically, reinvests dividends and benefits from Vanguard’s scale and tax-efficient structure as a share class of the Vanguard S&P 500 Index Fund.
Its expense ratio of 0.03% matches IVV’s, and its low cost has helped it attract significant inflows, surpassing SPY in assets under management in 2025.
VOO price performance (2023–2025)
VOO rose from about US $430 in late 2023 to roughly US $619 in November 2025, an increase of around 44%.
During 2024, VOO traded mainly between US $435 and US $555, consolidating as markets adjusted to changing rate expectations. In 2025, it advanced to highs near US $635 before ending the year slightly lower at US $619.
Past performance is not a reliable indicator of future results.
SPY vs IVV vs VOO: How they compare
| ETF | Launch year | Structure | Expense ratio | Typical use case | Key advantage |
|---|---|---|---|---|---|
| SPY | 1993 | Unit Investment Trust | 0.0945% | Trading and hedging | Deepest liquidity and options volume |
| IVV | 2000 | Open-ended ETF | 0.03% | Long-term investing | Dividend reinvestment and tax efficiency |
| VOO | 2010 | Mutual fund share class | 0.03% | Long-term investing | Lowest costs and strong inflows |
All three ETFs aim to replicate the same index and have historically shown very similar returns. However, differences in liquidity and cost mean they tend to serve different purposes.
Past performance is not a reliable indicator of future results.
Key takeaways
SPY, IVV and VOO remain reliable vehicles for S&P 500 exposure, each serving a distinct purpose.
- SPY is commonly used for short-term trading, options strategies and liquidity-driven execution.
- IVV and VOO may suit those building longer-term portfolios, where lower costs, reinvested dividends and tax efficiency can contribute to overall performance over time.
Recent performance data shows that all three achieved approximately +15–16% year-to-date returns in 2025, with total two-year gains exceeding 40%. Ultimately, each serves its purpose: SPY for tactical exposure, IVV and VOO for compounding efficiency.
FAQ
Why are SPY, IVV and VOO different if they all track the S&P 500?
SPY, IVV and VOO all replicate the S&P 500 index, but they differ in fund structure, costs and liquidity. SPY, launched in 1993, is a unit investment trust primarily designed for trading. IVV and VOO are newer open-ended ETFs that reinvest dividends and operate with lower expense ratios (0.03% compared with SPY’s 0.0945%). These distinctions mean SPY is more suitable for short-term trading, while IVV and VOO tend to be more efficient for long-term exposure due to lower ongoing costs and greater tax efficiency.
How do expense ratios affect ETF performance?
Expense ratios represent the annual management cost charged by the fund provider. While the difference between 0.03% and 0.09% may seem small, these fees compound over time, gradually reducing overall returns. For short-term traders, the impact is minimal, as positions are held briefly. For long-term investors, however, lower fees can make a noticeable difference to total returns over several years. It’s important to compare costs alongside other factors such as liquidity, tracking accuracy and tax treatment when evaluating ETFs.
Can you trade SPY, IVV and VOO as CFDs?
Yes. Through CFD trading, you can speculate on price movements in ETFs such as SPY, IVV and VOO without owning the underlying shares. This allows you to take long or short positions and use margin to increase exposure. However, leverage amplifies both potential gains and losses, so these instruments are intended for traders who understand the associated risks.