Generated April 2026 from current fund data.
Overview
IVV and SPY are both broad-based S&P 500 ETFs tracking the same underlying index. The critical distinction is cost: IVV charges 0.03% annually while SPY charges 0.09%, a threefold difference that compounds over decades. Both are passively managed, highly liquid, and designed to replicate large-cap U.S. equity performance with minimal tracking error.
How they differ
The expense ratio is the first and biggest difference. IVV's 0.03% fee is cheaper than SPY's 0.09%, meaning on a $100,000 position, you'll pay $30 versus $90 annually—a $60 gap that widens with portfolio size. Both distribute quarterly and yield roughly the same (IVV at 1.10%, SPY at 1.04%), so yield is not a meaningful differentiator. IVV has grown larger in absolute AUM ($720.5 billion vs. SPY's $651.6 billion), though both are gargantuan and equally liquid. SPY has a longer track record, launching in 1993 versus IVV's 2000 debut, but this history advantage carries minimal practical weight for an index fund.
Who each is best for
IVV: Cost-conscious long-term buy-and-hold investors who prioritize expense efficiency and plan to hold for decades; works equally well in taxable or tax-advantaged accounts.
SPY: Investors comfortable paying a modest fee premium for historical familiarity, the longest S&P 500 track record in the ETF space, or who already own SPY and see no reason to switch.
Key risks to know
- Tracking error is minimal for both funds but will slightly favor IVV due to the lower fee drag, though the difference will be imperceptible in any given year.
- Concentration risk inherent to S&P 500 exposure: both funds are heavily weighted to mega-cap technology and financial stocks, meaning market stress in those sectors directly impacts returns.
- Interest rate sensitivity: equity valuations overall are vulnerable to rising rates, which would pressure both equally since they hold identical underlying stocks.
- Liquidity is not a concern for either fund, but trading spreads are negligible for both at this scale.
Bottom line
If you're indifferent between the two, the math favors IVV's lower cost—that 0.06% difference saves $600 per million dollars invested annually. If you already own SPY and are satisfied with it, the switching benefit doesn't justify a taxable transaction. For new money, IVV's fee advantage makes it the simpler choice for long-term investors. Past performance doesn't predict future results, and both will track the S&P 500 closely regardless.
AI-generated analysis for educational purposes only. Verify important details independently; past performance does not guarantee future results.
