Which S&P 500 ETF Is the Better Buy: iShares' IVV or State Street's SPY?
Key Points
iShares Core S&P 500 ETF offers a lower expense ratio than State Street SPDR S&P 500 ETF Trust while tracking the same benchmark.
The iShares fund has slightly outperformed the State Street trust over the last year and provides a marginally higher trailing-12-month dividend yield.
Both exchange-traded funds maintain identical sector weights and very similar top holdings including Nvidia and Apple.
- 10 stocks we like better than iShares Core S&P 500 ETF ›
Comparing iShares Core S&P 500 ETF (NYSEMKT:IVV) to State Street SPDR S&P 500 ETF Trust (NYSEMKT:SPY) reveals nearly identical portfolios, but the iShares fund offers lower costs and a higher dividend yield.
Investors looking for broad U.S. large-cap exposure often choose between these two giants. While IVV and SPY both mirror the S&P 500 index, slight variations in expense ratios and structure lead to different total returns over time for long-term buy-and-hold portfolios.
Snapshot (cost & size)
| Metric | SPY | IVV |
|---|---|---|
| Issuer | SPDR | iShares |
| Expense ratio | 0.09% | 0.03% |
| 1-yr return (as of June 12, 2026) | 24.30% | 24.40% |
| Dividend yield | 1.00% | 1.10% |
| Beta | 1.00 | 1.00 |
| AUM | $783.1 billion | $802.0 billion |
Beta measures price volatility relative to the S&P 500; beta is calculated from five-year monthly returns. The 1-yr return represents total return over the trailing 12 months. Dividend yield is the trailing-12-month distribution yield.
The iShares Core S&P 500 ETF is more affordable, with an expense ratio of 0.03% compared to 0.09% for the State Street SPDR S&P 500 ETF Trust. This lower cost, paired with a slightly higher dividend yield of 1.10% for the iShares fund, can enhance long-term compounding.
Performance & risk comparison
| Metric | SPY | IVV |
|---|---|---|
| Max drawdown (5 yr) | (24.50%) | (24.50%) |
| Growth of $1,000 over 5 years (total return) | $1,872 | $1,877 |
What's inside
The iShares Core S&P 500 ETF (NYSEMKT:IVV) holds 504 stocks, and its largest positions include Nvidia (NASDAQ:NVDA) at 7.81%, Apple (NASDAQ:AAPL) at 6.69%, and Microsoft (NASDAQ:MSFT) at 4.54%. Launched in 2000, it concentrates 39% of its portfolio in technology, followed by 11% in financial services, and 11% in communication services. This fund has paid $8.06 per share over the trailing 12 months.
The State Street SPDR S&P 500 ETF Trust (NYSEMKT:SPY) also maintains 504 holdings, and its top positions include Nvidia at 7.84%, Apple at 6.84%, and Microsoft at 4.56%. Launched in 1993, its sector exposure mirrors the iShares fund with technology at 39.00%, financial services at 11%, and communication services at 11%. This trust has a trailing-12-month dividend of $7.38 per share.
For more guidance on ETF investing, check out the full guide at this link.
What this means for investors
Few investment decisions are as close to a coin flip as this one, and that is actually the most useful thing to understand about it. IVV and SPY track the same index, hold the same stocks in the same proportions, and have delivered nearly identical returns over every meaningful time horizon. Choosing between them will not make or break a long-term portfolio.
What does matter is cost. IVV charges just 0.03% annually compared to SPY's 0.09%. And over the last five years, IVV returned 81.12% including dividends, edging out SPY's 80.52%. That gap is small today but widens steadily as assets compound over decades. For buy-and-hold investors, IVV's lower fee and slightly higher yield give it a subtle structural advantage worth noting.
As the industry pioneer with unmatched trading volume, SPY remains the preferred vehicle for institutional investors and active traders who need to move large positions quickly and efficiently. For everyday long-term investors who simply want to own the S&P 500 and hold it, that liquidity premium is largely irrelevant. It’s a close call, but IVV is the more cost-efficient choice for building wealth quietly over time.
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Sara Appino has positions in Apple and Nvidia. The Motley Fool has positions in and recommends Apple, Microsoft, and Nvidia. The Motley Fool has a disclosure policy.
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