Total return % (price + reinvested dividends). Notice how the lines are virtually indistinguishable due to identical underlying holdings, with only microscopic tracking errors over a decade.
Why does SPY cost more than VOO?
SPY has an expense ratio of 0.0945%, which is over three times higher than VOO's 0.03%. So why does anyone buy SPY?
The answer is liquidity. SPY trades over 50 million shares a day and has by far the most liquid options market of any ETF in the world. For retail buy-and-hold investors, VOO or IVV are mathematically better due to lower fees. But for institutional investors, day traders, and options traders, the penny-wide bid/ask spreads on SPY options save them more money in execution costs than they lose to the slightly higher expense ratio.
Furthermore, SPY is structured as a Unit Investment Trust (UIT), meaning it cannot lend its shares to short sellers or reinvest dividends immediately (it must hold them in cash until distribution), which creates a slight cash drag compared to VOO and IVV.
Frequently Asked Questions
What is the expense ratio for SPY?
The SPDR S&P 500 ETF Trust (SPY) has an expense ratio of 0.0945%. This means for every $10,000 invested, you pay $9.45 annually in fees.
Is SPY better than VOO?
For long-term, buy-and-hold retail investors, VOO is mathematically better because its 0.03% expense ratio is cheaper. However, SPY is better for active traders and options traders due to its massive volume and tighter bid/ask spreads.
Why is SPY AUM so high?
SPY was the very first Exchange Traded Fund (ETF) launched in the United States in 1993. It had a massive first-mover advantage, capturing the bulk of institutional money, which it has retained due to unparalleled liquidity.
Does SPY pay dividends?
Yes, SPY pays quarterly dividends based on the underlying dividends paid by the 500 companies in the index. The current dividend yield is typically around 1.3% to 1.5%.
What is the difference between SPY and IVV?
Both track the S&P 500, but IVV is managed by iShares (BlackRock) with a 0.03% expense ratio, while SPY is managed by State Street with a 0.0945% expense ratio. Additionally, SPY is a Unit Investment Trust (UIT), while IVV is a standard open-end fund, allowing IVV to reinvest dividends and lend shares.
Methodology & Data Sources: Data sourced programmatically via Yahoo Finance API (yahoo-finance2) as of March 2026. Expense ratios, AUM, yields, and performance metrics reflect trailing or reported data. Historical chart calculates percentage change from adjusted close prices (inclusive of dividends and splits) with a monthly interval over a 10-year lookback.