## [# VOO vs SPY vs IVV: Which S&P 500 ETF Should You Buy in 2026?](/sections/news/voo-vs-spy-vs-ivv-which-sp-500-etf-should-you-buy-2026) # VOO vs SPY vs IVV: Which S&P 500 ETF Should You Buy in 2026? [VOO](https://www.etf.com/VOO), [SPY](https://www.etf.com/SPY), and [IVV](https://www.etf.com/IVV) all track the S&P 500 — but they are not identical products, and the differences matter. [VOO](https://www.etf.com/VOO) just became the world's first $1 trillion ETF. [SPY](https://www.etf.com/SPY) commands the options market. [IVV](https://www.etf.com/IVV) sits quietly between them with a structural tax edge. Here's the definitive comparison of the three largest S&P 500 ETFs, and a clear verdict on which one belongs in your portfolio. [![ETF.com](/sites/default/files/styles/author_image_icon/public/2023-12/etf.com_400x400.png?itok=LO34LQE1)](/contributors/etfcom-staff) [By ETF.com Staff](/contributors/etfcom-staff) Jun 08, 2026 Edited by: ETF.com Staff [ + Follow ](/etf/login) Share Email LinkedIn Facebook X (Twitter) googletag.cmd.push(function() { googletag.display('js-dfp-tag-article_page_302x26'); }); Loading If you've searched "[VOO](https://www.etf.com/VOO) vs [SPY](https://www.etf.com/SPY) vs [IVV](https://www.etf.com/IVV)," you're not alone. This is the most-searched ETF comparison on the internet — and for good reason. These three funds collectively hold nearly $2.7 trillion in assets and are the default answer to "how do I invest in the S&P 500?" But they're not the same product. The differences in cost, structure, and utility are real, and choosing the wrong one for your situation has a measurable cost over time. Here's everything you need to know. ## The Basics: What They Are All three ETFs track the S&P 500 Index — 500 of the largest U.S. publicly traded companies, weighted by market cap. They hold the same underlying stocks, they rebalance together when the index changes, and they've all delivered essentially identical long-term returns. The differences come from everything else: structure, cost, liquidity, and tax treatment. ETFIssuerExpense RatioAUMInceptionExchange[**VOO**](https://www.etf.com/VOO)Vanguard0.03%$1,000BSep 2010NYSE[**IVV**](https://www.etf.com/IVV)iShares (BlackRock)0.03%$860BMay 2000NYSE[**SPY**](https://www.etf.com/SPY)SPDR (State Street)0.0945%$787BJan 1993NYSE googletag.cmd.push(function() { googletag.display('js-dfp-tag-in_article_unit'); }); ## Expense Ratio: [VOO](https://www.etf.com/VOO) and [IVV](https://www.etf.com/IVV) Win This is the most commonly cited difference and the simplest. [VOO](https://www.etf.com/VOO) and [IVV](https://www.etf.com/IVV) both charge 0.03% annually — $3 per $10,000 invested. [SPY](https://www.etf.com/SPY) charges 0.0945%, more than three times as much. On a $10,000 investment compounding at 7% annually over 30 years, that cost difference adds up to approximately $1,400 in lost returns versus holding [VOO](https://www.etf.com/VOO) or [IVV](https://www.etf.com/IVV). Over a career of investing, the gap is significant. [SPY](https://www.etf.com/SPY)'s higher fee is a legacy of its 1993 structure as a Unit Investment Trust — a regulatory form that predates modern ETF architecture and carries constraints that made fee reduction difficult for many years. State Street has kept the fee intentionally high because [SPY](https://www.etf.com/SPY)'s massive liquidity and options ecosystem mean its primary users — institutional traders and hedge funds — don't care about 6 basis points. Long-term buy-and-hold investors should. ## Liquidity and Trading Volume: [SPY](https://www.etf.com/SPY) Dominates By every measure of trading liquidity, [SPY](https://www.etf.com/SPY) is in a league of its own. It is the most actively traded ETF on earth: - [**SPY**](https://www.etf.com/SPY): average daily volume ~$40–50 billion - [**IVV**](https://www.etf.com/IVV): average daily volume ~$5–8 billion - [**VOO**](https://www.etf.com/VOO): average daily volume ~$3–5 billion For buy-and-hold investors, this distinction is largely irrelevant. If you're placing a market order to buy $5,000 of an S&P 500 ETF once a month in your brokerage account, the bid-ask spread difference between [SPY](https://www.etf.com/SPY), [VOO](https://www.etf.com/VOO), and [IVV](https://www.etf.com/IVV) is fractions of a cent — it won't affect your returns in any meaningful way. For institutional traders, hedge funds, and anyone transacting in millions at a time, [SPY](https://www.etf.com/SPY)'s liquidity is decisive. Large blocks can be moved in [SPY](https://www.etf.com/SPY) without meaningfully moving the market in a way that would be harder in [VOO](https://www.etf.com/VOO) or [IVV](https://www.etf.com/IVV). ## Options Market: [SPY](https://www.etf.com/SPY), and It's Not Close [SPY](https://www.etf.com/SPY) dominates the U.S. ETF options market by a wide margin. Options on [SPY](https://www.etf.com/SPY) trade on multiple exchanges simultaneously, maintain tight bid-ask spreads, and offer the deepest open interest of any single-name options contract in the world — more liquid than options on any individual stock, including Apple, Nvidia, or Tesla. [IVV](https://www.etf.com/IVV) and [VOO](https://www.etf.com/VOO) both have listed options, but their open interest and volume are a fraction of [SPY](https://www.etf.com/SPY)'s. For any investor whose strategy involves covered calls, protective puts, cash-secured puts, or any other options overlay, [SPY](https://www.etf.com/SPY) is the only practical choice. The liquidity advantage is so large that the extra 6 basis points in annual fees is easily justified by better options execution. If you don't trade options, this section doesn't apply to you — use [VOO](https://www.etf.com/VOO) or [IVV](https://www.etf.com/IVV). ## Dividend Treatment: A Meaningful Structural Difference This is one of the less-discussed differences, but it matters. [**SPY**](https://www.etf.com/SPY) is a Unit Investment Trust (UIT), a legal structure from the 1930s. Under UIT rules, [SPY](https://www.etf.com/SPY) cannot reinvest dividends received from its holdings. Instead, dividends are held in a non-interest-bearing cash account and distributed to shareholders quarterly. During the period between receipt and distribution — potentially weeks — that cash earns nothing. This creates a small but real performance drag called "dividend drag" that doesn't affect [VOO](https://www.etf.com/VOO) or [IVV](https://www.etf.com/IVV). [**VOO**](https://www.etf.com/VOO) **and** [**IVV**](https://www.etf.com/IVV) are structured as open-end funds (the same legal structure as a typical mutual fund). They can reinvest dividends immediately upon receipt, keeping the money fully invested at all times. Over long periods in a rising market, this structural advantage adds a small but compounding benefit. ## Tax Efficiency: [IVV](https://www.etf.com/IVV) Has a Subtle Edge All three ETFs are highly tax-efficient compared to mutual funds, thanks to the ETF creation/redemption mechanism that allows funds to flush out low-basis shares without triggering capital gains distributions. In practice, [VOO](https://www.etf.com/VOO), [SPY](https://www.etf.com/SPY), and [IVV](https://www.etf.com/IVV) have all made zero or near-zero capital gains distributions historically. The subtle edge goes to [IVV](https://www.etf.com/IVV). BlackRock's iShares funds benefit from Vanguard's expired patent on the "heartbeat trade" mechanism — a technique that accelerates the flushing of embedded gains through creation/redemption activity. All major issuers now use some version of this. [IVV](https://www.etf.com/IVV) and [VOO](https://www.etf.com/VOO) are both excellent on tax efficiency; [SPY](https://www.etf.com/SPY)'s UIT structure is slightly less flexible but has not meaningfully distributed capital gains in recent years. For most investors in taxable accounts, the tax efficiency differences between these three are negligible. All three are far more tax-efficient than equivalent mutual funds. ## Share Price: Does It Matter? [SPY](https://www.etf.com/SPY) trades at roughly $760 per share. [VOO](https://www.etf.com/VOO) trades around $693. [IVV](https://www.etf.com/IVV) trades around $860. Share price is irrelevant to returns or costs — it's purely a function of how many times each fund has been split and when each started. All three give you the same economic exposure per dollar invested. The only scenario where share price matters is if you're investing a fixed amount and want to minimize the fractional share left over — and even then, most modern brokerages offer fractional shares. ## The Verdict **For long-term buy-and-hold investors:** [**VOO**](https://www.etf.com/VOO) **or** [**IVV**](https://www.etf.com/IVV)**.** The 0.03% expense ratio is the lowest available for an S&P 500 ETF, the open-end fund structure avoids dividend drag, and the tax efficiency is excellent. Between [VOO](https://www.etf.com/VOO) and [IVV](https://www.etf.com/IVV), the choice is largely personal preference. [VOO](https://www.etf.com/VOO) just crossed $1 trillion in AUM — a milestone that reflects its position as the default choice for retail buy-and-hold investors. [IVV](https://www.etf.com/IVV) is a worthy alternative, particularly in taxable accounts where BlackRock's tax management history may provide a marginal edge. **For active traders and options users:** [**SPY**](https://www.etf.com/SPY)**.** The liquidity and options ecosystem around [SPY](https://www.etf.com/SPY) is unmatched. Covered calls, protective puts, hedging strategies — all are easier, cheaper, and more flexible to execute with [SPY](https://www.etf.com/SPY). The higher expense ratio is a reasonable price to pay for access to the world's most liquid derivatives market. **For 401(k) investors:** You likely don't have a choice — your plan's S&P 500 option is what it is. If given a choice between a [VOO](https://www.etf.com/VOO) equivalent (Vanguard Institutional) and a [SPY](https://www.etf.com/SPY) equivalent (SPDR S&P 500), choose the lowest-cost option. If you are...Best choiceLong-term buy-and-hold, taxable account[VOO](https://www.etf.com/VOO) or [IVV](https://www.etf.com/IVV) Long-term buy-and-hold, retirement account[VOO](https://www.etf.com/VOO) or [IVV](https://www.etf.com/IVV) Active trader / options user[SPY](https://www.etf.com/SPY) Institutional / large block trading[SPY](https://www.etf.com/SPY) Cost-sensitive above all else[VOO](https://www.etf.com/VOO) or [IVV](https://www.etf.com/IVV) (tied) ## Bottom Line [VOO](https://www.etf.com/VOO), [SPY](https://www.etf.com/SPY), and [IVV](https://www.etf.com/IVV) will all deliver the S&P 500's returns over the long run. The choice between them is about optimizing for your specific situation — not picking a winner in some absolute sense. For the vast majority of individual investors building wealth over time, [VOO](https://www.etf.com/VOO) or [IVV](https://www.etf.com/IVV) is the right answer. For anyone who trades options or needs institutional-grade liquidity, [SPY](https://www.etf.com/SPY) earns its fee. What you should definitely not do: hold [SPY](https://www.etf.com/SPY) in a taxable brokerage account for 30 years when [VOO](https://www.etf.com/VOO) or [IVV](https://www.etf.com/IVV) would do the same job for one-third the cost. --- *This article was generated with the assistance of artificial intelligence and reviewed by ETF.com staff.* **Investment Risk Disclosure** The information provided on this website is for informational and educational purposes only and does not constitute investment advice, financial advice, trading advice, or any other sort of advice. Nothing on this site should be construed as a recommendation to buy, sell, or hold any security or financial product. **General Investment Risks** Investing involves risk, including the possible loss of principal. Past performance is not indicative of future results. The value of investments may fluctuate, and investors may receive back less than they originally invested. There is no guarantee that any investment strategy will achieve its objectives. **ETF-Specific Risks** Exchange-traded funds (ETFs) are subject to risks similar to those of stocks and other equity securities. ETF shares are bought and sold at market price, which may differ from the fund's net asset value (NAV). Brokerage commissions may apply and will reduce returns. ETFs may be subject to the following additional risks: **Market Risk:** The value of an ETF may decline due to broad market fluctuations unrelated to the underlying securities. **Liquidity Risk:** Some ETFs may have limited trading volume, which could make it difficult to buy or sell shares at a desired price. **Tracking Error Risk:** An ETF may not perfectly replicate the performance of its benchmark index. **Concentration Risk:** Sector or thematic ETFs may be concentrated in a particular industry or geography, increasing volatility. **Currency Risk:** ETFs that invest in international securities may be affected by exchange rate fluctuations. Leverage and Inverse Risk: Leveraged and inverse ETFs are designed for short-term trading and may not be suitable for long-term investors. These products use derivatives and may experience significant losses. **No Warranty** While efforts are made to ensure the accuracy of information presented, no warranties are made regarding completeness, accuracy, or timeliness. Information may change without notice. **Not a Fiduciary** This site does not act as a fiduciary on behalf of any user. Users are encouraged to consult with a registered investment advisor, financial planner, or other qualified professional before making any investment decisions. [ + Follow ](/etf/login) [ETF.com Staff](/contributors/etfcom-staff) etf.com is the single source for ETF intelligence. We provide real-time ETF news and analysis to educate investors and drive financial knowledge in… [View Bio](/contributors/etfcom-staff) Related Topics [Equity](http://www.etf.com/topics/equity) [S&P 500](http://www.etf.com/topics/sp-500)