IVV vs SPY : Side-by-Side ETF Comparison

IVV vs SPY are essentially identical S&P 500 trackers, but IVV charges 0.03% while SPY costs 0.10% - that's an extra $7 per year on every $10,000 invested. Performance differences are negligible (14.43% vs 14.36% one-year returns), so the fee gap is the only real decision point.

Table of Content

• Annual & Cumulative Returns
• Risk Metrics
• Dividend Yield & Growth
• Fees & Liquidity
• ETF Composition: Asset Classes
• Regional Allocation
• Sector Weights
• Top 10 Holdings
• Valuation & Growth Metrics
• Which ETF Fits Your Portfolio?

ETF Issuers & Investment Objective

IVV comes from iShares, the ETF arm of BlackRock, while SPY is managed by State Street Global Advisors under the SPDR brand. Both funds track the same S&P 500 index, but their structure differs slightly. IVV can use derivatives and hold up to 20% in cash equivalents, giving the portfolio manager more flexibility during volatile periods. SPY operates as a unit investment trust, which means it must fully replicate the index at all times without any synthetic positions.

These structural differences matter less than you might expect. The sector weights are nearly identical - technology makes up 34.3% of IVV and 34.2% of SPY, with financial services and communication services showing similarly minimal variation. Both funds deliver essentially the same market exposure. The real distinction lies in costs: IVV charges 0.03% annually while SPY costs 0.09%. On a $10,000 investment, that's $3 versus $9 per year. For buy-and-hold investors, those six extra dollars annually might not seem significant, but they add up over decades of compounding.

Annual & Cumulative Returns

Looking at the performance data, IVV edges out SPY by small but consistent margins across every time period. The gap ranges from 0.07% annually over one year to 0.08% over both three and ten years. These differences might seem trivial, but they compound meaningfully over decades - especially when you factor in IVV's lower expense ratio of 0.03% versus SPY's 0.10%.

The pattern here tells a clear story: both funds deliver virtually identical performance since they track the same index, but IVV's lower fees give it a slight structural advantage. Neither fund has pulled ahead dramatically during any period, suggesting both efficiently track their benchmark. For buy-and-hold investors, these tiny performance gaps can add up to real money over time, particularly in tax-advantaged accounts where you won't face the trading costs that SPY's higher liquidity might otherwise help you avoid.

Risk Metrics

The volatility numbers tell a clear story: IVV and SPY move almost in lockstep. Their 1-year volatility sits at 10.99% and 10.98% respectively, while the 3-year figures are similarly separated by just 0.01 percentage points. This makes perfect sense, since both funds track the same S&P 500 index with nearly identical holdings. The tiny differences likely come from slight variations in tracking efficiency or cash drag from dividend timing, not from any meaningful portfolio distinction.

Sharpe ratios paint the same picture. IVV edges out SPY 1.40 to 1.39 over three years, but this hair-thin margin reflects the expense ratio difference more than any skill. When you're paying 0.03% versus 0.10% annually for essentially the same basket of stocks, that seven basis point savings shows up in risk-adjusted returns. For buy-and-hold investors, this fee advantage compounds quietly in IVV's favor, though the gap remains small enough that trading costs or bid-ask spreads could easily erase it.

Dividend Yield & Growth

IVV's 1.17% yield edges out SPY's 1.07%, a difference that compounds over time for investors who reinvest dividends. Both funds pay quarterly, so the cash flow pattern feels identical in your brokerage account. The ten-basis-point gap stems from IVV's lower 0.03% expense ratio leaving more of the underlying index's dividends to pass through to shareholders.

This yield difference won't move the needle for short-term holders, but long-term investors keep an extra $10 per year on every $10,000 invested. Think of it as a tiny tailwind that adds up if you plan to hold for decades. Neither yield is high enough to matter much for income-focused portfolios anyway - these are growth vehicles that happen to pay modest dividends.

Fees & Liquidity

IVV charges 0.03% a year, which means you pay about $3 on every $10,000 invested. SPY’s fee is 0.095%, so the same stake costs roughly $9.50. That 6.5-basis-point gap sounds trivial, yet on a $100,000 holding kept for ten years the difference adds up to around $650, assuming market returns are identical. For buy-and-hold investors who auto-invest monthly, the lower fee tilts the math toward IVV without any real trade-off in holdings or performance.

What you don’t get with IVV is SPY’s depth of liquidity. SPY trades roughly 70 million shares daily and its bid-ask spread routinely sits one penny wide, so a round-trip in size rarely costs more than a basis point or two. IVV’s spread is still tight usually a penny, occasionally two but dollar volume is closer to 5 million shares, so larger blocks or market orders in the first or last minutes of the session can slip a basis point or two more. Unless you’re day-trading or running a hedging book, the extra spread is usually smaller than the annual fee savings IVV delivers, but anyone moving millions at a time should factor it in.

ETF Composition: Asset Classes

Both IVV and SPY hold essentially the same basket, so their asset-class footprints are nearly carbon copies: each keeps 99.1-99.2% of assets in U.S. large-caps, about 0.5% in the foreign listings that slip into the S&P 500, and a sliver of cash to manage flows. The difference is measured in hundredths of a percent IVV’s domestic weight is 0.07 percentage points higher and its cash stake is 0.07 points lower numbers that show up only in the third decimal place and have no practical impact on returns.

What investors do feel is the drag from that slightly larger cash pile in SPY. With 0.34% parked in money-market instruments versus 0.27% for IVV, SPY gives up a whisper of equity exposure every day, which helps explain why its 1-year return trails IVV by seven basis points even though both track the identical index. Unless you’re trading millions of shares, the gap is immaterial, but it illustrates how even tiny cash balances can nibble at performance.

Regional Allocation

Both IVV and SPY are essentially all-American portfolios. Each keeps just under 99.5% of assets in North American companies, with the crumbs spread across the U.K. (0.03-0.04%), developed Europe (0.38%), and emerging Asia (0.11-0.12%). The gap between the two funds on any single region is never more than two hundredths of a percentage point smaller than the daily cash drag from expense ratios.

For investors, this means the regional sleeve is a non-factor when choosing between them. Whether you buy IVV or SPY, you’re getting the same S&P 500 exposure; the microscopic foreign weightings come from a handful of multinational names that happen to be domiciled outside the U.S. but trade on U.S. exchanges. If international diversification matters to you, neither fund moves the needle you’ll need a separate developed- or emerging-market holding regardless of which S&P tracker you pick here.

Sector Weights

IVV and SPY are both S&P 500 trackers, so their sector splits move in lockstep. The largest gap is only 0.18 percentage points: SPY carries 12.75% in financial-services stocks versus IVV's 12.56%. Technology, the index's heavyweight, sits at 34.35% for IVV and 34.18% for SPY - a difference so small it will barely move the needle in a portfolio. Every other group - from consumer cyclicals to utilities - differs by less than 0.1 point, which explains why the two funds' returns are usually within a few basis points of each other.

These microscopic shifts come from sampling noise and the timing of index rebalancing, not from any active view. For buy-and-hold investors the choice between the pair will hinge on cost, liquidity and tax treatment, not sector bets. Traders who want to fine-tune exposure can ignore this section entirely - either fund gives you the same market profile.

Top 10 Holdings

The top five positions are virtually carbon copies between these two funds, with NVIDIA leading the pack at 7.59% of assets in both portfolios. Apple and Microsoft round out the big three at 6.20% and roughly 5.7% respectively, giving investors a 19.5% combined exposure to America's tech giants. Amazon and Alphabet complete the lineup at 3.85% and 3.25% positions, meaning just five stocks make up about a quarter of your money in either ETF.

This near-perfect overlap makes sense since both funds track the same S&P 500 index, but the concentration might surprise investors expecting broader diversification. With technology representing over one-third of each fund and the top ten holdings likely accounting for roughly 30% of total assets, you're getting more of a "large-cap tech plus friends" strategy than a truly equal-weight approach. The identical weights also confirm that either fund will deliver essentially the same exposure to market-moving mega-caps, so choosing between them comes down to cost and trading preferences rather than portfolio composition.

Valuation & Growth Metrics

IVV trades at 22.3 times earnings and 4.53 times book value, while SPY sits at 22.28 and 4.51 respectively. These numbers are practically identical - a difference of just 0.02 on P/E and 0.03 on P/B. What this tells you is that both funds own essentially the same basket of S&P 500 stocks, so their valuation metrics move in lockstep. Neither fund gives you a "cheaper" entry point to large-cap U.S. stocks.

The growth picture shows the same story. Long-term earnings growth expectations hover around 10.49% for both funds, with sales growth near 8%. These tiny gaps (we're talking hundredths of a percentage point) reflect the same underlying holdings, not any meaningful difference in growth prospects. Picking between these two won't change your exposure to growth stocks or value stocks - they're both just the S&P 500 in different wrappers.

Which ETF Fits Your Portfolio?

IVV's 0.03% expense ratio saves you seven basis points annually compared with SPY's 0.10%. That gap sounds tiny, but on a $100,000 holding it's $70 extra in your pocket every year, compounding silently while the funds track the same 500 stocks. Performance backs up the bargain: IVV edged out SPY by 0.07 percentage points over the past twelve months, and the slightly higher 1.17% yield doesn't hurt either.

Pick IVV if you care about squeezing out every last basis point of cost. Choose SPY if you want the deepest options market and ticker everyone recognizes. Either way you're getting the same sector mix - roughly a third in tech - and near-identical P/E ratios around 22.3. The real decision is whether cheaper-and-quieter or liquid-and-famous matters more to how you invest.

If you want to have look at other ETF comparisons, check out this: Fund Overlap Tool

Data sources: The data has been obtained from the ETF provider's website and ETF fact sheet.