SPY vs IVV: 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

Stacking SPY vs IVV side-by-side, the return spread is just a few basis-points. Because SPY’s 0.095 % fee is higher than IVV’s 0.03 %, the legacy fund forfeits a sliver of performance each year, and that compounding drag explains why IVV edges ahead in every period—even the YTD tally. In other words, when two ETFs own the exact same S&P 500 basket, the cheaper wrapper keeps more of the index’s gain.

Risk Metrics

Plot one-year or three-year volatility for SPY vs IVV and the lines overlap: 11.42 % versus 11.44 % is statistical noise, not a real divergence. Both products replicate the S&P 500 share-for-share, so risk-adjusted returns (Sharpe 0.50) track in lock-step. Selecting one ticker over the other does not change your market risk profile.

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

The dividend discussion for SPY vs IVV is practically a copy-paste. Each ETF passes through the index’s quarterly payouts, leaving both with a ~1.5 % trailing yield. Neither tries to harvest higher income by tilting the portfolio, so investors chasing big cash flow need to look elsewhere; these funds deliver 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

When liquidity is mission-critical, SPY and IVV is no contest: SPY often trades $30–50 billion a day and boasts the deepest options chain, giving active traders near-instant fills. IVV counters with the fee advantage (0.03 % vs 0.09 %) and an equally razor-thin ~0.01 % spread, making it the smarter pick for buy-and-hold investors who don’t need lightning-fast execution.

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 - SPY vs IVV?

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.