IVV vs SPY : Side-by-Side ETF Comparison

Which one is better? The only meaningful difference is that IVV charges a rock-bottom 0.03 % fee while SPY costs 0.09 % but offers unmatched trading volume and options depth.
Pick IVV for long-term, low-touch investing and SPY for high-velocity trading, otherwise the two funds are twins.

Table of Content

ETF Issuers & Investment Objective

When you pit IVV against SPY, the first distinction is the firms standing behind each ticker: BlackRock’s iShares franchise versus State Street Global Advisors (SSGA) two giants that helped drag index investing into the mainstream.

iShares Core S&P 500 ETF (IVV)

Launched May 2000, IVV is part of BlackRock’s low-cost “Core” lineup, built to be a permanent foundation in long-term portfolios. The fund’s mandate is simple: replicate before fees the returns of the S&P 500 Index by owning every constituent in cap-weighted proportion. Unlike SPY’s older unit-investment-trust setup, IVV is an open-end ETF, which means it can reinvest dividends the day they are received, lend securities to earn extra income, and make fractional-share adjustments with ease. BlackRock markets IVV as the frugal, fully-featured S&P 500 wrapper, pairing razor-thin 0.03 % expenses with deep liquidity and the operational flexibility modern advisors demand.

SPDR S&P 500 ETF Trust (SPY)

Born January 1993, SPY holds the title of first and most-traded ETF on the planet. Its objective remains the gold standard: track the S&P 500 tick-for-tick by holding each stock at index weight. Organized as a unit-investment trust (UIT), SPY cannot reinvest cash intraday or engage in securities lending quirks of a structure drafted before today’s ETF rulebook existed yet those limitations haven’t dulled its appeal. SPY’s history, clock-like transparency, and massive daily volume make it the benchmark trading vehicle for institutions hedging billions and retail investors seeking instant, one-click exposure to the broad U.S. market.

Annual & Cumulative Returns

When you line up the scorecards, the gap between IVV and SPY is measured in fractions of a percent. That sliver comes almost entirely from fees: IVV’s 0.03 % expense ratio drags less than SPY’s 0.095 %, so after compounding the cheaper fund pockets a few extra basis-points. The smaller YTD loss you see for IVV is the same story two funds holding the identical S&P 500 basket can only differentiate themselves by cost control.

Risk Metrics

Volatility and Sharpe ratios sit nearly on top of one another because both ETFs replicate the index tick-for-tick. The microscopic distinction 11.44 % vs 11.42 % one-year volatility is statistical noise stemming from overnight cash and settlement timing, not any structural edge. In short, you’re assuming the same market risk no matter which ticker you choose.

Explanation:

• Volatility reflects how much the price moves over time higher volatility means more frequent or larger price swings.
• Sharpe Ratio measures risk-adjusted returns: how much return you get for each unit of risk. Higher is better.

Dividend Yield & Growth

With each fund simply passing through the S&P 500’s quarterly payouts, their trailing yields converge around ~1.5 %. Neither product tilts toward high-yield names, so investors craving larger income streams must look elsewhere; here, the mandate is broad-market beta first, dividends second.

Explanation:

• Dividend Yield is the percentage of the fund's current price that is paid out annually as dividends.

Fees & Liquidity

SPY still rules the trading pit: it boasts the deepest options market and the highest dollar volume, which is why institutions prefer it for tactical moves. IVV wins the fee shoot-out (0.03 % vs 0.09 %) and already enjoys a razor-thin ~0.01 % bid-ask spread; for long-term holders that lower expense ratio usually outweighs SPY’s added liquidity.

Explanation:

• Expense Ratio is the annual fee taken by the fund manager, expressed as a % of your investment.
• Bid-Ask Spread is the difference between the buying and selling price. Smaller spreads mean lower transaction costs.

ETF Composition: Asset Classes

Because both portfolios are fully invested in the same index, differences are vanishingly small. The one eyebrow-raiser SPY’s 0.11 % cash exists to grease its massive daily share creations and redemptions. IVV runs closer to 100 % equity exposure, a nuance that explains its fractional return advantage.

Regional Allocation

Geographically, each fund is a U.S. play: ≥99 % North-America. The trivial 0.43 % Europe Developed slice and the 0.04 % U.K. footprint arise from multinationals booking sales abroad, not from any deliberate tilt by State Street or iShares.

Sector Weights

Sector bars align to the second decimal because Standard & Poor’s classifications flow straight through. Technology’s ~33 % heft dominates thanks to mega-caps like Microsoft and NVIDIA, while Energy, Utilities and Real Estate stay in the low single digits. Any decimal mismatch usually reflects file-timestamp differences rather than active management.

Top 10 Holdings

Tiny flips Microsoft at 6.81 % in IVV vs 6.75 % in SPY, Apple vice-versa come from two mechanics: (1) share counts shift intraday, and (2) SPY parks dividends in cash until reinvestment, briefly trimming stock weights. Functionally, both ETFs are powered by the same ten titans.

Valuation & Growth Metrics

Valuation Ratios

Forward P/E (~21.08), Price/Book (~4.08) and every other multiple land in dead-heat territory because the valuation is inherited from the underlying stocks. Choosing IVV doesn’t buy “cheaper” companies only a cheaper wrapper that lets you keep an extra 6 bps per year.

Explanation:

• P/E Ratio = Price divided by earnings. Indicates how expensive a fund is relative to profits.
• Price/Book = Price vs book value (assets minus liabilities).
• Price/Sales = Price relative to total revenue.
• Price/Cash Flow = Price relative to how much cash the companies generate.

Growth Expectations

Projected EPS growth of ≈9.7 %, historical earnings growth near 9.3 %, and mid-single-digit cash-flow gains all reflect consensus expectations for the S&P’s mega-caps. Again, the growth story is identical; IVV’s edge lies in allowing investors to retain more of that growth by paying fewer fees, not by finding faster-growing firms.

Which ETF Fits Your Portfolio - IVV vs SPY?

Think of IVV and SPY as two doors that open into the same S&P 500 room the difference is how you prefer to step inside.

1. Long-Term, Low-Touch Investors

If you simply buy, add on pay-day, and forget:

Pick IVV. Its rock-bottom 0.03 % expense ratio shaves six extra basis points off SPY’s fee every single year. Over decades that tiny number snowballs, so cost efficiency trumps everything else.

2. High-Velocity Traders & Options Strategists

If you swing large blocks, run intraday hedges, or write weekly calls:

Choose SPY. It remains the liquidity king, often trading $30-50 billion a day with the deepest, tightest-spread options chain on the planet. Moving in and out quickly matters more than saving a handful of bps in fees.

3. Tax & Cash-Drag Conscious Holders

Prefer dividends reinvested the moment they arrive and minimal idle cash?

IVV’s open-end structure can immediately sweep distributions back into the portfolio, while SPY, as a unit investment trust, parks cash until its quarterly payout.That makes IVV marginally more tax-efficient and ever so slightly closer to fully invested.

4. Hybrid or “Core-Plus” Tacticians

You want an S&P 500 anchor plus frequent tactical overlays (puts, collars, sector tilts): SPY is the street’s default quote. Bid-ask spreads are a penny wide, block liquidity is instant, and option strikes populate every dollar.

The Quick Rule of Thumb

Buy-and-hold? Go with IVV.
Trade or hedge aggressively? Stick with SPY.

Either way, you still own a carbon-copy slice of the U.S. large-cap market the wrapper you select simply tunes cost versus convenience to match your investing style.