S&P 500 ETF options give a variety of ways to buy the largest 500 companies in America, but with so many options, how do you know which fund fits your portfolio? Take a look at Benzinga's top picks for the best esportiva bet:S&P 500 ETFs.
Quick Look at the Best S&P 500 ETFs:
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Learn About ETFs
Best S&P 500 ETFs
1. Best Overall: iShares Core S&P 500 ETF (IVV)
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BlackRock’s iShares has developed a number of useful investment vehicles, but its S&P 500 ETF might be the best of the bunch. Boasting a tiny 0.04% expense ratio, this ETF closely tracks the S&P 500 and only slight deviations occur throughout the year (12-month median tracking diffe༺rence of -0.04%). The fund began trading back in May 2000 and has returned 5.59%🎉 since its inception.
While smaller than its peer SPY, the IVV still provides plenty of liquidity and discloses its holding daily (unlike other S&P 500 ETFs). IVV is a great core holding for any long-term portfolio and you’ll save at tax time thanks to the fund’s structure. iShares’ ♔fund advisors claim to have never paid capital gains in a decade and instead, deliver qualified dividends where high earners pay less in taxes. IVV is part of the iShares core portfolio of ETFs, which are designed to form the basis of a long-term investment portfolio.
2. Best for Low Expenses: Vanguard S&P 500 ETF (VOO)
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With a tiny 0.03% expense ratio, VOO is one of the cheapest ETFs available today. It doesn’t have the volume of its predecessor, SPY, but it still trades over 3 million shares per day and is available at every major brokerage. VOO currently has over $100 billion in assets under management and has mirrored the S&P 5✅00 almost exactly since its inception in 2010, returning 13.49% compared to the S&P's 13.52%.
3. Best for Liquidity and Volume: SPDR S&P 500 ETF Trust (SPY)
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The oldies can still be goodies when it comes to index funds, and the world’s first ever ETF, "born" in 1993, remains one of the strongest buys if you’d like to add broad S&P 500 exp♛osure to your portfolio. The SPDR S&P 500 ETF ♓Trust (SPY) was designed to track an index like the S&P 500.
The fund is slightly more expensive than its peers IVV and VOO at 0.0945%, but the daily trading volume makes a more liquid investment. SPY also differs from IVV and VOO in fund struc🐈ture.
As a unit investment trust (UIT), SPY doesn’t reinvest dividends into the portfolio and shields investors from having to pay capital gains. UITs have a defined termination date and SPY is scheduled to terminate on January 21, 2114.4. SPDR Portfolio S&P 500 ETF (SPLG)
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5. Best for Large-Caps: Schwab U.S. Large Cap ETF (SCHX)
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Many index funds competing with the big 3 (IVV, VOO and SPY) follow similar yet different benchmarks than the S&P 500 index. The Schwab U.S. Large Cap ETF tracks the 780 largest-cap stocks in the United States, giving exposure to an additional 280 companies not available in strict S&P 500 in🦋dex trackers.
The top 10 holdings are nearly identical to the holdings of SPY, IVV and VOO, but with less weight on the top names like Apple, esportiva bet:Microsoft and Amazon. The top 10 holdings only comprise 19% of the fund, compared to 22% of the funds more strictly focused on S&P 500 companies. Despite this different structure, the SCHX follows the S&P 500 quite closely and does it for a miniscule 0.03% expense ratio.
6. Best for Maximizing Gains: iShares S&P 500 Growth ETF (IVW)
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Weighting stocks by these factors means the fund will lean heavily toward the tech portion of the index and the top 10 holdings comprise over 34% of the fund's holdings. A 0.18% expense ratio makes this fund more expensive than SPY, IVV or V𝐆OO.&n🌄bsp;
7. Best for Mid-Cap Balance: Invesco S&P 500 Equal Weight ETF (RSP)
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- IT
- Industrials
- Healthcare
- Financials
- Consumer Discretionary
- Consumer Staples
- Real Estate
- Utilities
- Materials
- Communication Services
- Energy
Best Brokers for ETFs
- Best For:Active and Global TradersSecurely through Interactive Brokers’ website
What are S&P 500 ETFs?
The esportiva bet:Standard and Poor’s 500 is an index of the 500 biggest companies in the United States by market capitalization trading on the esportiva bet:New York Stock Exchange (NYSE) and NASDAQ. Formed i🎃n 1923, the first iteration was known as the “Composite Index” and tracked onl♎y a handful of securities.
In 1957, the number was multiplied to 500 and the index was rechristened the S&P 500. The index has different ticker symbol depending on the listing, but the most common are $SPX, ^GSPC and INX.
- Market cap of over $6.1 billion.
- Dollar value of at least $1.
- Monthly trading volume of at least 250,000 shares.
Without the S&P 500, ETFs may have never been born. In 1993, State Street Global Advisors in Boston devised a new type of investment product. The new security would be a basket of stocks similar to a mutual fund but traded on an exchange during the day like the stocks that comprised it. This first exchange-traded fund traꦍcked the S&P 500, traded under the ticker symbol SPY,ღ and still does today.
Pros
- Exposure to a wider range of stocks than indexes like Dow Jones Industrial Average.
- Not as tech heavy as the NASDAQ Composite.
- S&P 500 ETFs often carry some of the lowest expense ratios in the industry.
- ETFs are more tax-efficient than mutual funds.
Cons
- ETFs are less risky due to diversification, but gains will rarely exceed average market returns.
- You must consider short term capital gains tax implications.
- Free-float capitalization weighting means smaller companies frequently ignore ETFs.
What to Look for
- Availability: Is this ETF widely available through most brokerages? How much trading volume occurs in an average 10-day period? You don’t want to purchase an ETF you’ll be stuck with if things go sour, so make sure the one you buy has plenty of trading volume.
- Low fees: Since we’re looking for funds that track an index, look for those that keep fees to a minimum. After all, there’s no fund manager to pay when you buy ETFs.
- Closely tracks the benchmark: Choose an S&P 500 ETF that actually tracks the S&P 500. Every fund has its own special sauce, but you don’t want to deviate too far from the benchmark.
Choose Your Portfolio
S&P 500 ETFs are a great way for investors to form a base for a long-term stock portfolio. The ETFs tracking the index have modest expense ratios, great liquidity and pose less risk than picking stocks yourself. Investors looking to build up esportiva bet:retirement savings should start with one of the ETFs on𝔉 this list.
Want to learn more? Check out Benzinga's guide to the esportiva bet:best online brokerages, esportiva bet:free stock trading and esportiva bet:best ETFs for this year.
Frequently Asked Questions
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About Dan Schmidt
Dan Schmidt is a finance writer passionate about hജelping readers understand how assets and markets work. He has over six years of writing experience, focused on stocks. His work has been published by Vanguard, Capital One, PenFed Credit Union, MarketBeat, and Fora Financial. Dan lives in Bucks County, PA with his wife and enjoys summers a♏t Citizens Bank Park cheering on the Phillies.