The SPDR Portfolio S&P 500 ETF (SPYM +0.21%) and the iShares Core S&P 500 ETF (IVV +0.18%) both offer broad, low-cost S&P 500 exposure, but SPYM stands out for its lower expense ratio while IVV leads in assets under management (AUM) and liquidity.

The analysis highlights differences in cost, scale, performance, and portfolio composition to help investors determine which ETF may better suit their needs.

Snapshot (cost & size)

Beta measures price volatility relative to the S&P 500. The 1-yr return represents total return over the trailing 12 months.

The two funds offer identical dividend yields, and while SPYM is very slightly more affordable with a lower expense ratio, the difference is marginal and likely won't make a meaningful difference for most investors.

Performance & risk comparison

What's inside

IVV seeks to mirror the S&P 500, holding 503 U.S. large-cap stocks. Around 35% of assets are allocated to the technology sector, with 13% to financial services and 11% to communication services.

Its top holdings are Nvidia, Apple, and Microsoft. The fund has a long track record, with more than 25 years in operation, and does not feature any notable structural quirks.

SPYM is nearly identical to IVV in terms of its sector allocations and top holdings. Like IVV, SPYM is designed for broad, low-cost exposure to the S&P 500 and does not include any unique overlays or constraints.

For more guidance on ETF investing, check out the full guide at this link.

What this means for investors

SPYM and IVV both track the S&P 500, aiming to replicate the index's performance. So it makes sense that they've experienced nearly identical returns with the same overall portfolio and sector allocations.

They're also remarkably similar in terms of yield and cost. SPYM has a very slight advantage with its expense ratio, charging 0.02% compared to IVV's 0.03%. In other words, investors can expect to pay $2 per year in fees for every $10,000 invested in SPYM, compared to $3 per year with IVV.

One notable difference between the two is the total assets under management (AUM). IVV is significantly larger than SPYM, providing greater liquidity and making it easier for investors to buy and sell large amounts without affecting the ETF's share price.

For most everyday investors, the AUM is unlikely to make a meaningful difference. But considering it's one of the only factors setting these two ETFs apart, it's something to consider.

Glossary

ETF: Exchange-traded fund that holds a basket of securities and trades on an exchange like a stock.
S&P 500: Index of 500 leading large U.S. companies, often used as a benchmark for the overall stock market.
Expense ratio: Annual fund fee, expressed as a percentage of assets, covering management and operating costs.
Assets under management (AUM): Total market value of all assets that a fund or manager oversees.
Dividend yield: Annual dividends per share divided by share price, showing income return as a percentage.
Total return: Investment performance including price changes plus all dividends and distributions, assuming reinvestment.
Beta: Measure of an investment’s volatility relative to a benchmark index, typically 1.0 for that index.
Max drawdown: Largest peak-to-trough decline in an investment’s value over a specified period.
Growth of $1,000: Illustration showing how a $1,000 investment would have increased or decreased over time.
Sector weights: Percentage of a fund’s assets allocated to different industries, such as Technology or Financial Services.
Liquidity: How easily and quickly an investment can be bought or sold without significantly affecting its price.
Risk-adjusted returns: Investment returns evaluated relative to the amount of risk taken to achieve them.