Potential investors should also be aware that VOO is considered a separate class share of its mutual fund.
“This has potential tax benefits and drawbacks because taxable events related to the mutual fund assets can affect the ETF’s assets and vice versa,” Rawson said.
Rawson argues that investors may consider IVV due to its cheap 0.07% expense ratio, compared to SPY’s 0.09% expense ratio, and the iShares ETF’s better job matching the underlying index. Additionally, VOO is the cheapest of the bunch with a 0.05% expense ratio.
However, while IVV and VOO are cheaper, the two ETFs show lower activity, compared to SPY. IVV has a 4.1 million average daily volume, VOO has a 1.4 million average daily volume and SPY has a 111.7 million average daily volume.
Investors would probably just utilize the iShares and Vanguard as a buy-and-hold option since holding fees have a bigger impact on returns than trading costs. Consequently, large and fast traders would probably prefer SPY while long-term investors would stick to cheaper VOO or IVV.
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Max Chen contributed to this article.