S&P Index ETF Guide: VOO vs IVV vs SPY for 2026

An S&P 500 index ETF lets you own 500 of America's biggest companies in one trade, often for an annual cost of about $3 per $10,000 invested. Three funds dominate this space: VOO, IVV, and SPY. They track the same index, but the fees and ideal use cases differ. Here is how they compare, with numbers current as of June 2026.

What an S&P 500 Index ETF Is

An S&P 500 index ETF is a fund that holds the same roughly 500 large U.S. companies as the S&P 500 Index. Because it trades on an exchange like a stock, you can buy or sell it anytime during market hours.

The appeal is instant diversification at very low cost. One share spreads your money across companies like Apple, Microsoft, and Amazon, so no single stock can sink your investment.

These funds are passive, meaning they simply mirror the index instead of paying managers to pick stocks. That keeps fees tiny.

The Three Big S&P 500 ETFs

VOO (Vanguard S&P 500 ETF). Run by Vanguard, with an expense ratio of 0.03% as of June 2026. It is one of the largest ETFs in the world and a favorite of long-term, buy-and-hold investors.

IVV (iShares Core S&P 500 ETF). Run by BlackRock, also charging 0.03%. It is nearly identical to VOO in cost and performance and holds hundreds of billions in assets.

SPY (SPDR S&P 500 ETF Trust). The oldest U.S. ETF, run by State Street. It charges a higher expense ratio of about 0.0945%, but it has the deepest liquidity and the most active options market, which traders value.

Side-by-Side Comparison

All three track the same index, so their returns are nearly identical year to year. The clearest difference is cost.

Why the Fee Difference Matters

The gap between 0.03% and 0.0945% looks tiny, but it compounds over decades. On a $50,000 starting balance held for 30 years, the higher SPY fee can cost roughly $11,000 in lost growth compared with VOO or IVV.

For long-term investors, the lower-cost funds, VOO and IVV, usually make more sense. SPY's edge is liquidity and its huge options market, which matters mostly to active traders, not buy-and-hold savers.

Low fees do not eliminate risk. All three funds rise and fall with the market and can post double-digit losses in a bad year.

What Returns to Expect

The S&P 500 has averaged about 10% a year over the long run since 1957, or closer to 7% a year after inflation. These are averages across many decades, not guarantees.

The index has had sharp down years, including drops of more than 20%. An S&P 500 ETF is a lower-risk way to own stocks thanks to diversification, but it is not risk-free, and past performance does not guarantee future results.

How to Choose and Buy One

If you are investing for the long haul, VOO or IVV is hard to beat on cost. If you trade frequently or use options, SPY's liquidity may be worth the higher fee. For most beginners building wealth slowly, the cheaper funds win.

You can buy any of these through nearly any brokerage. Robinhood offers commission-free trades and fractional shares with no account minimum, so you can buy a slice of VOO for as little as $1.

Public is another commission-free app supporting ETFs and fractional shares in a simple interface, making it easy to start small and add to your position over time.

To keep your investments in view alongside your spending and savings, Monarch Money connects your accounts into one dashboard. Checking your full picture now and then helps you avoid reacting to short-term swings.

This is general education, not investment advice. Expense ratios and terms can change, returns vary, and you should weigh your own goals before investing.

Frequently Asked Questions

Which is the best S&P 500 index ETF?

For long-term investors, VOO and IVV are usually the best choices because both charge a low 0.03% expense ratio as of June 2026 and track the same index. SPY is excellent for active traders due to its liquidity and options market, but its higher fee of about 0.0945% makes it less ideal for buy-and-hold investing.

What is the cheapest S&P 500 ETF?

VOO and IVV are tied as among the cheapest, each charging an expense ratio of 0.03%. That works out to roughly $3 a year for every $10,000 invested. SPY is more expensive at about 0.0945%, or roughly $9.45 per $10,000.

Do VOO, IVV, and SPY hold the same stocks?

Yes. All three track the S&P 500 Index, so they hold essentially the same roughly 500 large U.S. companies in similar proportions. Their year-to-year returns are nearly identical, which is why cost is the main thing that sets them apart.

Is an S&P 500 index ETF a safe investment?

It is considered a lower-risk way to invest in stocks because your money is spread across hundreds of companies. However, it is not risk-free. The S&P 500 can fall sharply in a downturn, so these ETFs are best for money you can leave invested for several years or more.