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Are All S&P 500 ETFs the Same?

Dan Caplinger
May 26, 2013

The S&P 500 (INDEX: ^GSPC) is the benchmark by which thousands of money managers overseeing trillions of dollars in assets are judged. For passive index investors who believe that active management doesn't add value over the long run, choosing index-tracking exchange-traded funds tied to the S&P 500 helps them meet their goal of matching the market's overall return.

But many different ETFs track the S&P 500. Which one makes the most sense for you? Let's look at some of the more popular S&P 500-tracking ETFs to pinpoint their differences.

A look at three top S&P ETFs
The biggest S&P-tracking ETF is the SPDR S&P 500 (NYSEMKT: SPY), affectionately known as the Spiders. It was the first exchange-traded fund product to gain widespread use, and it's now a giant in the industry, with $140 billion under management. Its expense ratio is 0.09%, and with average volume of about 133 million shares daily, the Spiders trade $22 billion worth of shares each day -- meaning it takes less than seven days for the entire outstanding share-count to turn over.

Much smaller is the iShares Core S&P 500 ETF (NYSEMKT: IVV). With about $43 billion under management, the iShares ETF comes with lower expenses of 0.07%, but much lower average daily volume of just 3.8 million shares. Like the Spiders, its share price roughly corresponds to a tenth of the value of the S&P 500 index.

Finally, the Vanguard S&P 500 ETF (NYSEMKT: VOO) rounds out the major S&P ETFs. Unlike the other two ETFs, its share price bears no resemblance to the index's actual value. With less than $10 billion under management and barely 1.1 million shares trading hands each day, it's also the least liquid of the three ETFs. Yet its expense ratio of 0.05% is also the lowest of the three.

Does an S&P 500 ETF by any other name perform as well?
From a performance standpoint, all three of these ETFs perform the way you'd expect, with returns that trail the S&P 500 index by roughly the amount of their respective expense ratios over the long run. From year to yea