Table of contents
- Returns and Dividends
- Costs
- Liquidity
- VOO vs. SPY vs. IVV vs. SPLG: Which should Singapore investors choose?
It’s no surprise that investors like S&P 500 ETFs. Many people use them for diversified exposure to the US market, and they rank among the top traded ETFs on Syfe’s Brokerage.
S&P 500 ETFs track the S&P 500 index, which is considered to be a bellwether for the US economy. The index holds 500 of the largest US stocks across all industries such as technology, energy, financials, and healthcare.
When you invest in a S&P 500 ETF, you automatically own top stocks like Apple, Tesla, Disney, and Warren Buffett’s Berkshire Hathaway, amongst others. Historically, the average annualised return for the index has been around 10%.
Given the popularity of the S&P 500 index, there are many ETFs tracking it. Here’s a comparison between four of the most popular ones among Singaporeans: VOO (NYSEARCA:VOO), SPY (NYSEARCA:SPY), IVV (NYSEARCA:IVV) and SPLG (NYSEARCA: SPLG).
| S&P 500 ETFs | Vanguard S&P 500 ETF | SPDR S&P 500 ETF Trust | iShares Core S&P 500 ETF | SPDR Portfolio S&P 500 ETF |
| Ticker | VOO | SPY | IVV | SPLG |
| Expense Ratio | 0.03% | 0.09% | 0.03% | 0.02% |
| Net Assets (in USD) | 1.11T | 536.15B | 454.64B | 33.51B |
| Number of Holdings | 508 | 504 | 503 | 503 |
| Top 10 Holdings (% of total assets) | 32.21% | 32.07% | 32.08% | 31.95% |
| Year of Inception | 2010 | 1993 | 2000 | 2005 |
What is VOO: Vanguard S&P 500 ETF (NYSEARCA: VOO)
VOO is the most popular ETF on Syfe’s Brokerage. It’s offered by Vanguard, the brokerage firm founded by Jack Bogle, who’s considered by many to be the “father of index investing”.
Vanguard is currently the world’s largest provider of index funds and they’re known for their very low fund fees. Indeed, VOO’s expense ratio is just 0.03%. In other words, your annual fee on a $10,000 investment in VOO is only $3!
What is SPY: SPDR S&P 500 ETF Trust (NYSEARCA: SPY)
SPY is the oldest and probably the most well-known S&P 500 ETF. Launched in 1993, it’s offered by State Street Global Advisors. Because of its reputation, it’s traded a lot more frequently compared to VOO and IVV. SPY trades 85 million shares on average each day while VOO and IVV each trade less than 5 million.
Although this makes SPY more liquid, all four ETFs are so widely traded that the liquidity difference is immaterial for the average investor. The primary difference between SPY, VOO and IVV is cost. SPY has an expense ratio of 0.09% while VOO and IVV only cost 0.03%.
IVV is offered by iShares, part of the BlackRock family of funds. Like Vanguard and State Street Global Advisors, BlackRock is one of the world’s largest asset managers.
Since its inception in 2000, IVV has grown to become one of the largest ETFs in the world, amassing assets of over $446.520 billion.
With an expense ratio of 0.03%, IVV is identical in cost to VOO, making it one of the more affordable ETFs featured here.
What is SPLG: SPDR Portfolio S&P 500 ETF (NYSEARCA: SPLG)
Like SPY, SPLG is an ETF launched by State Street Global Advisors that tracks the S&P 500. You might be wondering: why would State Street launch an ETF so similar to SPY, one of the biggest funds in the world.
The answer: fees.
Instead of lowering the cost on their existing products, ETF issuers like State Street are launching what are essentially copies of their ETFs with lower fees. This allows them to continue collecting the higher fees on the existing ETFs while providing retail investors a more cost-friendly alternative.
Returns and Dividends
Since VOO, SPY, IVV, and SPLG track the same index and have nearly identical holdings, their performance is largely similar. In addition, all four ETFs distribute dividends from their underlying companies on a quarterly basis.
Here’s a comparison of their performance.
| S&P 500 ETFs | VOO | SPY | IVV | SPLG |
| 3-Year Total Return (Annualised) | 9.1% | 9.1% | 9.1% | 9.1% |
| 5-Year Total Return (Annualised) | 13.8% | 13.8% | 13.8% | 13.8% |
| 10-Year Total Return (Annualised) | 12.9% | 12.9% | 12.9% | 12.8% |
| Dividend Yield (p.a) | 1.3% | 1.2% | 1.3% | 1.3% |
Costs
Expense ratios are an important factor when considering an ETF. A fund with higher fees can significantly impact your total return over time, which may see cheaper funds outperforming their more expensive counterparts in the long run if all other factors remain equal.
Here’s how the ETFs fare in terms of expense ratio:
| S&P 500 ETFs | VOO | SPY | IVV | SPLG |
| Expense Ratio (YTD) | 0.03% | 0.09% | 0.03% | 0.02% |
Liquidity
One of the key feature of an ETF is its liquidity, allowing investors to quickly and efficiently sell the fund for cash.
As mentioned earlier, SPY is traded a lot frequently because of its popularity. Although this makes SPY more liquid, all four ETFs are so widely traded that their liquidity is sufficient for an average investor.
| S&P 500 ETFs | VOO | SPY | IVV | SPLG |
| Avg Trading Volume | 5,298,751 | 73,464,283 | 5,821,458 | 8,967,370 |
VOO vs. SPY vs. IVV vs. SPLG: Which should Singapore investors choose?
For most investors, the differences between the four ETFs are minor. They all track the same index, have similar holdings, and largely similar returns.
The primary difference between SPY, VOO, IVV, and SPLG is their cost.
SPLG has the lowest cost at 0.02%, followed by VOO and IVV at 0.03%, and SPY at 0.09%. If you are a cost-conscious investor, the VOO, IVV, and SPLG might make a more attractive option compared to SPY with their lower expense ratios. Conversely, you might appreciate the higher liquidity of SPY if you’re an active or institutional trader.
Ultimately, VOO, SPY, IVV, and SPLG are all great options. As the saying goes, the best time to invest was yesterday. The more important thing is to start investing, instead of spending too much time deciding between the four funds.
How to buy S&P 500 ETFs in Singapore
You can invest in VOO, SPY, IVV or SPLG through a brokerage platform like Syfe’s Brokerage.
Syfe’s Brokerage makes it easy – and free – to invest in US stocks and ETFs. Simply search for the ticker symbol, enter the dollar value you wish to invest, and click on the “Buy” button. On top of the low commission fees, you enjoy free trades each month. Best of all, there’s no platform fee and no hidden fees when you use Brokerage.
New to Syfe? Download the Syfe app to get started and receive S$20 when you sign up using the promo code ‘SYFEPROMO’.
