Same Index, Lower Fees: How SPLG Stacks Up Against SPY

• SPLG offers the same S&P 500 exposure as SPY at a much lower expense ratio
• SPLG and SPY posted identical one-year returns of 13.8%
• SPY commands far greater trading volume and assets under management than SPLG

SPDR Portfolio S&P 500 ETF (AMEX: SPLG) and SPDR S&P 500 ETF Trust (NYSEMKT:SPY) both track the S&P 500, but SPLG stands out for its lower cost, while SPY dominates in assets under management and trading liquidity.

Both the SPDR Portfolio S&P 500 ETF (AMEX: SPLG) and the SPDR S&P 500 ETF Trust (NYSEMKT:SPY) are designed to mirror the S&P 500 Index, providing investors with broad exposure to U.S. large-cap stocks. SPLG may appeal to cost-conscious investors, while SPY’s deep liquidity and long track record could attract those prioritizing seamless trading or institutional-scale assets.

Snapshot (cost & size)

Beta measures price volatility relative to the S&P 500; beta is calculated from five-year weekly returns. The 1-yr return represents total return over the trailing 12 months.

SPLG is more affordable with a 0.02% expense ratio compared to SPY’s 0.09%, yet both funds offer the same dividend yield, making SPLG the cost leader for S&P 500 exposure.

Performance & risk comparison

What's inside

SPY holds 503 companies spanning all S&P 500 sectors, with a tilt toward technology (36%), followed by financial services (13%) and consumer cyclicals (11%). Its largest positions are Nvidia (NASDAQ: NVDA), Apple (NASDAQ: AAPL), and Microsoft (NASDAQ: MSFT), each comprising less than 0.1% of assets. Launched over 32 years ago, SPY’s long track record and massive assets under management (AUM) set it apart among U.S. equity ETFs.

SPLG mirrors SPY’s sector breakdown and leading holdings, with similarly broad exposure across 504 stocks and a technology-heavy allocation. Both funds lack notable quirks—no leverage, currency hedging, or ESG overlays—making them straightforward S&P 500 trackers.

For more guidance on ETF investing, check out the full guide at this link.

Foolish take

When comparing SPLG and SPY, the first thing that stands out is their similarity. Both deliver full S&P 500 exposure and have historically moved almost in lockstep. The real distinction is cost. SPLG gives investors the same index at a meaningfully lower expense ratio, which can add up for anyone building a long-term core position.

SPY still holds an advantage where liquidity matters. Its trading volume and deep options market make it the preferred tool for institutions and traders who need precise execution. That level of flexibility is difficult for any low-cost alternative to match.

For investors building a long-term core position, SPLG tends to be the more efficient choice because it delivers the same market exposure at a lower ongoing cost. For investors who need maximum trading flexibility or treat the ETF as a tactical instrument rather than a portfolio anchor, SPY offers a level of liquidity that is hard to match. Both funds mirror the same index and both execute that mandate well. What matters is choosing the one that aligns with the way you invest, because that decision ultimately shapes your long-term results far more than the funds’ small differences on paper.

Glossary

ETF: Exchange-traded fund; a fund that trades on stock exchanges and holds a basket of securities.
Expense ratio: The annual fee, as a percentage of assets, that a fund charges to cover operating costs.
Liquidity: How easily an asset can be bought or sold without affecting its price.
Assets under management (AUM): The total market value of assets that a fund manages on behalf of investors.
Dividend yield: The annual dividends paid by a fund, expressed as a percentage of its share price.
Beta: A measure of a fund's volatility compared to the overall market; 1.00 means equal volatility to the market.
Max drawdown: The largest percentage drop from a fund's peak value to its lowest point over a specific period.
Sector allocation: The distribution of a fund's investments across different industries or sectors.
Leverage: The use of borrowed money to increase potential returns, which also increases risk.
Currency hedging: Strategies used to reduce the impact of currency exchange rate fluctuations on investment returns.
ESG overlays: Investment strategies that consider environmental, social, and governance factors when selecting securities.
Total return: The investment's price change plus all dividends and distributions, assuming those payouts are reinvested.

Eric Trie has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.