Prime S&P 500 ETFs
Prime S&P 500 ETFs
The S&P 500 Index commenced a bullish phase on June 8 following a 20% recovery from its October 2022 nadirs. For investors harboring optimism regarding the market's sustained success, these four exchange-traded funds (ETFs) provide access to one of the most extensively monitored benchmarks in the U.S. stock market.
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iShares Essential S&P 500 ETF, Vanguard Standard & Poor's 500 ETF, and SPDR Portfolio S&P 500 are designed to cater to investors in search of the most competitive expense ratios. The SPDR S&P 500 ETF is particularly suited for investors and active traders who prioritize high liquidity.
Key TakeAway
- The S&P 500 Index breached bullish terrain in the beginning of June following a 25% decline from its December 2021 pinnacle.
- iShares Fundamental S&P 500 ETF, Vanguard Standard & Poor's 500 ETF, SPDR Portfolio S&P 500, and SPDR S&P 500 ETF grant investors access to the index.
- When opting for an S&P 500 ETF, investors should take into account the expenses they will incur and the liquidity of each fund.
- Apple Inc. (AAPL) assumes the position of the largest company in the S&P 500, thus being the foremost holding in each of these funds.
Investors have been emboldened by diminishing inflation and the Federal Reserve's choice to halt interest rate increases during its June assembly. The S&P 500's price-earnings ratio over the past 12 months has declined by 11% in the previous year, rendering several of these stocks more affordable.
Here, we delve deeper into four S&P 500 ETFs. We have omitted leveraged ETFs, which offer amplified returns but carry additional risk. All the data presented below is accurate as of June 14.
S&P 500 ETF Offering the Most Competitive Expenses: iShares Essential S&P 500 ETF (IVV) (Tie)
- Expense Ratio: 0.03%
- One-Year Performance: 15.4%
- Annual Dividend Yield: 1.56%
- Average Daily Volume over 30 Days: 3,668,396
- Total Assets Managed: $326.1 billion
- Commencement Date: May 15, 2000
- Issuer: BlackRock Financial Management
S&P 500 ETF Offering the Most Competitive Expenses: Vanguard Standard & Poor's 500 ETF (VOO) (Tie)
- Expense Ratio: 0.03%
- One-Year Performance: 15.3%
- Annual Dividend Yield: 1.57%
- Average Daily Volume over 30 Days: 3,590,357
- Total Assets Managed: $312.6 billion
- Commencement Date: Sept. 7, 2010
- Issuer: Vanguard
S&P 500 ETF Offering the Most Competitive Expenses: SPDR Portfolio S&P 500 ETF (SPLG) (Tie)
- Expense Ratio: 0.03%
- One-Year Performance: 15.3%
- Annual Dividend Yield: 1.59%
- Average Daily Volume over 30 Days: 3,191,321
- Total Assets Managed: $18.3 billion
- Commencement Date: Nov. 8, 2005
- Issuer: State Street Global Advisors
S&P 500 ETF with the Highest Liquidity: SPDR S&P 500 ETF (SPY)
Liquidity reflects the ease of buying or selling an ETF, and higher liquidity generally results in lower trading costs. Although trading costs are not a concern for long-term ETF investors, active traders prefer highly liquid funds to minimize expenses.
- Expense Ratio: 0.0945%
- One-Year Performance: 15.3%
- Annual Dividend Yield: 1.60%
- Average Daily Volume over 30 Days: 80,884,133
- Total Assets Managed: $413 billion
- Commencement Date: Jan. 22, 1993
- Issuer: State Street Global Advisors
The Significance of Expense Ratios
Given that these ETFs track the performance of the S&P 500 index, one of the primary factors influencing long-term returns is the amount charged in fees by a fund. The fees associated with an ETF are quantified by its expense ratio, which represents the percentage of an investor's assets that the fund manager retains to cover the fund's maintenance costs.
An ETF's expense ratio can have a substantial impact on an investor's overall returns over the long term. For instance, if an investor allocates $10,000 to a fund that generates a 10% annual return, they would pay $336 in fees for a fund with a 0.5% expense ratio. In contrast, if the same investor invested the same amount in a fund with a 2.5% expense ratio, they would pay $1,682 in fees.
The remarks, viewpoints, and analyses shared on Investopedia serve solely as informational content on the internet. Please refer to our warranty and liability disclaimer for detailed information.At the time of writing this article, the author does not possess any of the aforementioned ETFs.