Cost Conscious? Vanguard S&P 500 ETF Tops SPDR Rival
Key Points
Vanguard S&P 500 ETF offers a lower expense ratio of 0.03% compared to the 0.09% fee for the SPDR fund.
Both funds track the same index and demonstrate matching five-year risk profiles with identical beta levels and maximum drawdowns.
The SPDR ETF was launched in 1993 as the first exchange-traded fund in the U.S., while the Vanguard fund has grown larger by assets under management since 2010.
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The primary distinction between Vanguard S&P 500 ETF (NYSEMKT:VOO) and State Street SPDR S&P 500 ETF (NYSEMKT:SPY) centers on cost and asset scale, as both provide nearly identical exposure to large-cap U.S. equities.
These two heavyweights represent the most popular vehicles for owning the S&P 500 Index. While SPY is a historical pioneer favored by institutional traders for its deep liquidity, VOO has become a cornerstone for long-term individual investors seeking to minimize management costs while capturing broad market growth.
Snapshot (cost & size)
| Metric | SPY | VOO |
|---|---|---|
| Issuer | SPDR | Vanguard |
| Expense ratio | 0.09% | 0.03% |
| 1-yr return (as of June 24, 2026) | 21.7% | 21.7% |
| Dividend yield | 1% | 1% |
| Beta | 1.00 | 1.00 |
| AUM | $769 billion | $1.7 trillion |
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 Vanguard fund is the more affordable choice with an expense ratio of 0.03%, which is one-third the cost of the SPDR ETF. Opinions may vary on how meaningful that cost differential is.
Performance & risk comparison
| Metric | SPY | VOO |
|---|---|---|
| Max drawdown (5 yr) | (24.5%) | (24.5%) |
| Growth of $1,000 over 5 years (total return) | $1,926 | $1,930 |
What's inside
The Vanguard ETF holds 505 stocks and seeks to replicate the returns of the S&P 500 Index. Its largest positions include Nvidia (NASDAQ:NVDA) at 7.9%, Apple (NASDAQ:AAPL) at 7.05%, and Microsoft (NASDAQ:MSFT) at 5.15%. This fund, launched in 2010, concentrates its assets in technology (39%), financial services (11%), and communication services (10%). It has paid $7.13 per share in dividends over the trailing 12 months and maintained a 52-week trading range between $545.75 and $699.15.
The SPDR fund manages a portfolio of 504 holdings. Top holdings include Nvidia at 7.8%, Apple at 6.82%, and Microsoft at 4.41%. Launched in 1993, the ETF has a similar sector distribution across technology (39%), financial services (11%), and communication services (11%). It has a trailing-12-month dividend payout of $9.29 per share and a 52-week trading range between $591.89 and $760.40.
For more guidance on ETF investing, check out the full guide at this link.
What this means for investors
With apologies to the Bard:
"Two fund giants, both alike in dignity,
On fair Wall Street, where we lay our scene."
Given these two ETFs both track the S&P 500, there's no real difference in performance or dividend yield. The three primary distinctions between SPY and VOO are cost, AUM, and average trading volume.
Cost: VOO has a rock-bottom 0.03% expense ratio. SPY charges 0.09%. So $10,000 invested in VOO would cost you $3 annnually. For SPY, it would be $9. I personally don't think saving $6 on a $10,000 investment is going to make a massive difference in your long-term returns, but you might disagree.
AUM: VOO is a giant, with $1.7 trillion in AUM. SPY is not even half as large.
Average trading volume: SPY is much smaller than VOO in terms of AUM, but it has nearly seven times as much average trading volume. So if liquidity is important to you, SPY would probably be a more attractive investment.
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Erin Kennedy has positions in Apple and Vanguard S&P 500 ETF. The Motley Fool has positions in and recommends Apple, Microsoft, Nvidia, and Vanguard S&P 500 ETF. The Motley Fool has a disclosure policy.
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