ETFs & indices

IVV vs SPY vs VOO: Comparing S&P 500 ETFs

Astron Team · 09/24/2026 · 6 min read

A common mistake among those starting to study international ETFs is thinking that if two funds track the same index, the result will always be identical. In the case of the three best-known ETFs tied to the S&P 500, SPY, IVV, and VOO, that assumption isn't entirely true. Although all three track the five hundred largest publicly listed companies in the United States, they differ in legal structure, annual cost, liquidity, and how they handle dividends.

This article compares the three ETFs point by point, to help understand why these differences, small on their own, can matter quite a bit depending on your profile and investment horizon.

What the three have in common

SPY, IVV, and VOO replicate the same index, the S&P 500, made up of the five hundred largest publicly traded companies in the United States, weighted by market value. That means, in portfolio composition, the three funds hold practically the same stocks, in roughly the same proportions. The performance difference between them, over time, mostly comes from each fund's structure, not from asset selection.

SPY: the pioneer, with extremely high liquidity

Launched in 1993, SPY was one of the world's first ETFs and remains the most heavily traded globally. Its legal structure (an older type of fund, called a unit investment trust) is considered outdated by today's standards, but that hasn't hurt its popularity among short-term traders.

SPY's strong point is liquidity: the daily traded volume is huge, resulting in minimal differences between the buy and sell price, and a fairly developed options market on the fund. On the other hand, its expense ratio is usually a bit higher than that of its newer competitors.

IVV and VOO: focus on cost and long-term efficiency

IVV and VOO were launched after SPY, with a more modern legal structure (open-end funds, which reinvest dividends more efficiently internally) and lower expense ratios. For those planning to hold the investment for many years, this fee difference, even a small one, adds up over time.

An example of cost impact over the long term

Suppose an investment of R$ 50,000 in an ETF with a 0.09% annual fee and another with a 0.03% fee, both with an identical gross return of 8% a year over 20 years. The 0.06% annual difference seems irrelevant on its own, but over two decades, the cheaper fund preserves an extra fraction of the assets that, depending on the amount invested, can represent thousands of reais more in the final result, just because of the cost difference accumulated year after year.

• SPY: higher liquidity, more developed options market, higher fee.
• IVV and VOO: more modern structure, lower fees, ideal for the long term.
• All three track the same index, with very similar portfolio composition.
• Small cost differences add up significantly over decades.

Which to choose, depending on the goal

For short-term traders entering and exiting positions frequently, SPY's liquidity and its deeper options market usually matter more than the annual fee difference, which has little impact on trades lasting a few days. For those planning to hold the investment for years, without frequently turning over the position, IVV's or VOO's lower fee tends to pay off more over the accumulated period.

Tax differences

How each fund handles dividends received from the companies also varies according to its legal structure, which can have different tax implications for foreign investors. It's worth checking the current rules before deciding, since legislation can change over time.

How to decide in practice

If the priority is trading actively and taking advantage of short-term moves, SPY is usually the more practical choice because of its liquidity. If the priority is building wealth long-term at the lowest possible cost, IVV or VOO tend to be more suitable. In either case, remember that investing in ETFs that track the S&P 500 remains exposed to the swings of the American stock market, including periods of decline, and there's no guarantee of a positive return over any time frame.