SPDR S&P 500 (NYSEArca: SPY) and iShares Core S&P 500 (NYSEArca: IVV) also track the U.S. blue-chip index. SPY and IVV charge fees of 0.09% and 0.07%, respectively, according to Morningstar. [Comparing Three S&P 500 ETFs]
VOO is the ETF share class of Vanguard’s S&P 500 index fund.
VOO’s reverse split will raise the ETF’s share price while cutting the number of shares outstanding. The overall value of VOO shareholders’ investments will not change.
Vanguard is saying that boosting the share price of VOO will reduce transaction costs because ETF investors will trade fewer shares. VOO was trading around $77 a share on Wednesday morning. SPY and IVV shares both trade just under $170.
“We made this move to lower the overall transaction cost of the ETF,” of which spreads are a part, a Vanguard spokesman said in an emailed statement Wednesday. “It is consistent with our ongoing efforts to lower the cost and complexity of investing for all investors.”
Full disclosure: Tom Lydon’s clients own SPY.
Story updated to correct VOO assets under management.