Which S&P 500 ETF Is Better in 2026? State Street's SPY or iShares' IVV?
Key Points
iShares Core S&P 500 ETF provides a more cost-effective way to access the S&P 500 with a lower expense ratio than State Street SPDR S&P 500 ETF
Both funds track the same benchmark, resulting in identical volatility profiles and nearly matching five-year maximum drawdowns
iShares Core S&P 500 ETF manages a larger volume of assets under management and offers a marginally higher trailing-12-month dividend yield
- 10 stocks we like better than iShares Core S&P 500 ETF ›
Many investors are looking for an S&P 500 index ETF to track the world’s most important index. But which to choose? The iShares Core S&P 500 ETF (NYSEMKT:IVV) offers a nearly identical portfolio to State Street SPDR S&P 500 ETF (NYSEMKT:SPY) but features a lower expense ratio and higher assets under management (AUM).
While the SPDR trust is the oldest and most recognized exchange-traded fund tracking the S&P 500, the iShares fund has become a massive competitor by offering a lower-cost alternative to the same index. Both funds aim to provide broad, diversified exposure to the largest, most established companies in the U.S. stock market for long-term growth.
Snapshot (cost & size)
| Metric | SPY | IVV |
|---|---|---|
| Issuer | SPDR | iShares |
| Share price | $744.78 (as of 2026-07-02) | $748.43 (as of 2026-07-02) |
| Expense ratio | 0.0945% | 0.03% |
| 1-yr return (as of July 2, 2026) | 21.4% | 21.5% |
| Dividend yield | 1.0% | 1.1% |
| Beta | 1.00 | 1.00 |
| AUM | $782.1 billion | $885.5 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. |
Expense ratios are the primary differentiator in this match-up. The iShares fund is significantly more affordable for long-term holders with a 0.03% expense ratio compared to the 0.0945% charged by the SPDR trust. Because of this lower fee and slight differences in internal cash management, it also provides a marginally higher dividend payout to its shareholders.
Performance & risk comparison
| Metric | SPY | IVV |
|---|---|---|
| Max drawdown (5 yr) | (24.5%) | (24.5%) |
| Growth of $1,000 over 5 years (total return) | $1,837 | $1,843 |
What's inside
iShares Core S&P 500 ETF — IVV — holds 503 securities to track the S&P 500 index. Its sector allocation is led by technology at 39%, followed by financial services and communication services at 11% each. Its largest positions include Nvidia Corp (NASDAQ:NVDA) at 7.88%, Apple Inc (NASDAQ:AAPL) at 7.04%, and Microsoft Corp (NASDAQ:MSFT) at 5.18%. This concentration in tech giants is a defining feature of the current S&P 500 composition. It was launched in 2000. iShares Core S&P 500 ETF has paid $8.19 per share over the trailing 12 months, which, on its recent $748.43 share price, works out to a 1.1% yield.
State Street SPDR S&P 500 ETF — SPY — maintains 503 holdings and provides similar market-cap-weighted exposure to the same universe of stocks. Sector weights are identical, with technology at 39%, financial services at 11%, and communication services at 11%. Top holdings include Nvidia at 7.89%, Apple at 7.05%, and Microsoft at 5.14%. Like its competitor, these tech-heavy weights represent the index's tilt toward the information technology sector. It was launched in 1993. State Street SPDR S&P 500 ETF has paid $7.52 per share over the trailing 12 months, which, on its recent $744.78 share price, works out to a 1% yield.
Which fund is the better buy?
You are forgiven if you think you are looking at identical funds. For all intents they are. That doesn’t mean there can be differences, for instance, in the execution of moving into and out of stocks that are added to and dropped from the S&P 500 Index.
In that case, SPY shows more of this tracking error, capturing 99.64% of the S&P 500’s upside compared to IVV’s better 99.93%. Both exceed the S&P 500’s downside a smidgen, with SPY being incrementally better at returning 100.1% of tracking to the index’s downside, compared to 100.2% for IVV.
That and SPY’s much higher expenses, relative to IVV’s, explain why SPY is the worst performer of the two over multiple time frames.
SPY returned 22.2% over the past three years compared to 22.29% for IVV. Over the 5-year time frame, SPY returned 20.48% while IVV returned 20.58%. And in the 10-year look-back, SPY falls a bit short of IVV again, at an annualized return of 15.4% vs. 15.47%.
The choice here is easy: go with the lower-cost, better-performing index-tracking ETF, iShares’ IVV.
For more guidance on ETF investing, check out the full guide at this link.
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Brendan Coffey has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Apple, Microsoft, and Nvidia. The Motley Fool has a disclosure policy.
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