iShares and SPDR ETFs Offer Similar Exposure With Different Scale

The iShares Core S&P Total U.S. Stock Market ETF (NYSEMKT:ITOT) and the State Street SPDR Portfolio S&P 1500 Composite Stock Market ETF (NYSEMKT:SPTM) provide nearly identical broad-market exposure at identical fees.

Investors seeking total market exposure often weigh these two funds. While SPTM tracks the S&P Composite 1500, ITOT targets a broader benchmark of American shares. Both are designed as low-cost core holdings, offering broad market representation to help investors build diversified portfolios across market capitalizations.

Snapshot (cost & size)

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.

Both funds charge a minimal 0.03% expense ratio, meaning investors pay just $0.30 annually for every $1,000 invested. Their matching 1.00% dividend yields further underscore their similarities for core portfolio placement.

Performance & risk comparison

What's inside

The iShares fund provides broad exposure to the U.S. equity market and is designed to mirror a comprehensive benchmark of U.S. shares. Its sector weights are led by technology at 37.00%, financial services at 11.00%, and consumer cyclical at 10.00%. It was launched in 2004. Its largest positions include Nvidia Corp (NASDAQ:NVDA) at 6.91%, Apple Inc (NASDAQ:AAPL) at 5.92%, and Microsoft Corp (NASDAQ:MSFT) at 4.02%. It has paid $1.61 per share over the trailing 12 months.

In contrast, the State Street fund tracks the S&P Composite 1500 Index and was launched in 2000. It holds 1,512 stocks, with a trailing-12-month dividend of $0.95 per share. Its sector exposure is identical, featuring technology at 37.00%, financial services at 11.00%, and consumer cyclical at 10.00%. Its largest positions include Nvidia Corp at 7.23%, Apple Inc at 6.30%, and Microsoft Corp at 4.21%. The fund encompasses approximately 90% of the investable U.S. equity universe.

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

Which looks like the better buy

The iShares Core S&P Total U.S. Stock Market ETF (ITOT) and the State Street SPDR Portfolio S&P 1500 Composite Stock Market ETF (SPTM) are both designed as core holdings exchange-traded funds (ETFs), meaning they can serve as foundational building blocks in a well-constructed investment portfolio. Here’s how these two ETFs match up with one another.

First, we must address how similar these two funds are. They have several identical characteristics. Their expense ratios, for example, are the same at 0.03%. For reference, many ETFs have expense ratios well above 0.50%. So, an expense ratio of 0.03% is very affordable. Second, the funds’ dividend yields are very similar. SPTM has a current dividend yield of 1.04%, while ITOT has a current dividend yield of 1.00%. While both yields are modest, they do provide some income for investors seeking to generate cash from their core holdings. Finally, both funds aim to replicate similar segments of the stock market. This is why their performance characteristics are so similar.

For example, since 2004, ITOT has delivered a total return of 868%, with a compound annual growth rate (CAGR) of 10.67%. SPTM, meanwhile, has delivered a total return of 841%, with a CAGR of 10.52%. The S&P 500 (as measured by the State Street SPDR S&P 500 ETF (SPY)) has recorded a total return of 891%, with a CAGR of 10.78% over the same period.

In summary, both of these funds have come very close to tracking the benchmark S&P 500 index over more than two decades. They each have very low expense ratios and offer modest dividend yields. Perhaps the only significant difference between the two funds relates to AUM. ITOT is larger, with over $93 billion in AUM, while SPTM is smaller, with about $13 billion in AUM. But, even here, these differences are splitting hairs. Both funds offer ample liquidity, making it easy for investors to buy and sell shares. In the end, the choice between these two will largely come down to personal preference.

Jake Lerch has positions in Nvidia. The Motley Fool has positions in and recommends Apple, Microsoft, and Nvidia. The Motley Fool has a disclosure policy.