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The four most-owned S&P 500 index funds — VOO (0.03% expense ratio), IVV (0.03%), FXAIX (0.015%), and SPY (0.0945%) — all track the same 500 companies, yet differ meaningfully on structure, liquidity, and tax behaviour. For long-term buy-and-hold investors in taxable accounts, VOO or IVV are the cost-efficient default. For active traders and options desks, SPY's extreme liquidity wins. For tax-advantaged automatic investing, FXAIX often fits best. Here is the full comparison.
All figures as of June 2026. Expense ratios from fund providers; AUM from ETF.com.
| Fund | Ticker | Expense Ratio | AUM (approx.) | Structure | Best for |
|---|---|---|---|---|---|
| Vanguard S&P 500 ETF | VOO | 0.03% | ~$957B | Open-End ETF | Long-term buy-and-hold; taxable accounts |
| iShares Core S&P 500 ETF | IVV | 0.03% | ~$873B | Open-End ETF | Long-term; slightly higher intraday liquidity than VOO |
| SPDR S&P 500 ETF Trust | SPY | 0.0945% | ~$776B | Unit Investment Trust | Active traders; options desks; institutional hedging |
| Fidelity 500 Index Fund | FXAIX | 0.015% | — | Mutual Fund | Tax-advantaged accounts (IRA, 401k); dollar-based auto-investing |
| SPDR Portfolio S&P 500 ETF | SPLG | 0.02% | — | Open-End ETF | Fee-minimizers who don't need SPY-level liquidity |
The S&P 500 is a market-capitalization-weighted index of 500 of the largest publicly traded U.S. companies, widely used as the benchmark for U.S. large-cap equity performance. As of June 29, 2026, the index stood at 7,440.43 (Federal Reserve Economic Data). An S&P 500 index fund holds all 500 constituents in proportion to their market capitalisation — when you buy VOO or SPY, you own a slice of every company in the index.
SPY is organised as a Unit Investment Trust (UIT), a legacy structure from 1993 that cannot automatically reinvest dividends — cash piles up in the trust until the quarterly distribution date, creating a small drag during rising markets. VOO and IVV are open-end funds, which can temporarily reinvest dividend income in the underlying holdings before distribution, reducing that drag. Source: ETF.com comparison.
In practice the drag is small for buy-and-hold investors, but it is the structural reason SPY's expense ratio (0.0945%) is higher than VOO's or IVV's (0.03%) — the UIT structure limits the trust's ability to run the securities-lending programmes that offset costs in open-end funds.
Because every S&P 500 index fund tracks the identical basket of securities, the expense ratio is the primary differentiator in net returns over long horizons. A 0.0945% annual fee (SPY) versus 0.015% (FXAIX) is only 8 basis points per year — a small difference that nonetheless compounds over decades. Choosing the lowest-cost fund that matches your wrapper and liquidity needs is the most reliable way to maximise net returns. Source: Morningstar — how to pick an S&P 500 fund.
A common strategy in taxable accounts is tax-loss harvesting: selling a position at a loss to offset realised gains elsewhere. The IRS wash sale rule prevents claiming a loss if you buy a "substantially identical" security within 30 days before or after the sale. Because VOO, IVV, and SPY all track the exact same index, swapping one for another during a downturn may be treated as a wash sale, rendering the loss disallowed. Investors who harvest losses across this group typically swap into a fund tracking a different but highly correlated index — such as a Russell 1000 or Total Stock Market fund — to preserve the tax benefit while maintaining similar market exposure.
In 2026, the S&P 500 is heavily weighted toward a small number of mega-cap technology companies. This concentration means that a sharp correction in any of the top holdings has an outsized effect on the entire index — and on any fund that tracks it. Long-term investors aware of this risk sometimes pair an S&P 500 ETF with an equal-weight S&P 500 fund (such as RSP, where every constituent receives the same weight regardless of market cap) or add dedicated mid-cap and small-cap index funds to balance the large-cap bias.
Before settling on any fund, evaluate your overall allocation. Understanding how S&P 500 holdings interact with your other assets — real estate, private equity, fixed income — is central to a coherent investment strategy.
If you hold VOO, SPY, or IVV alongside other assets, 8FIGURES can show you how your large-cap U.S. equity exposure fits into your total portfolio. Analyze your portfolio allocation with 8FIGURES — see concentration risk, sector weights, and asset class breakdown in one view. We operate under SEC-registered investment adviser standards; review our AI Advice Disclosure for details on how our guidance is provided.
8FIGURES Inc. is an SEC-registered investment adviser. This article is for educational and informational purposes only and does not constitute personalised investment, tax, or legal advice. Expense ratios, AUM figures, and index levels are subject to change. All investing involves risk, including the possible loss of principal. Past performance is not indicative of future results. Verify current fund data directly with fund providers before making investment decisions.
Managing your investments has never been easier!
