Best S&P 500 ETFs July 2024
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BLUEPRINT
Updated 2:37 p.m. UTC July 2, 2024
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Due to their versatility and simplicity, you can use S&P 500 exchange-traded funds as core portfolio building blocks.
Our selection of the best S&P 500 ETFs of 2024 have a 10-year annualized tracking error of 0.28% or less, a net expense ratio of 0.2% or less, at least $1 billion in assets under management, and a minimum 10-year track record of performance.
Why trust our investing experts
Experienced fund analysts select our best fund selections based on screening several must-have metrics. These metrics include but are not limited to assets under management, expense ratio, strategy, management, minimum investment requirements, turnover and fees. You can read more about our methodology below.
- 3,000+ ETFs screened.
- 3 levels of fact-checking.
- 3-step editorial review.
Best S&P 500 ETFs
- SPDR S&P 500 ETF Trust (SPY).
- iShares Core S&P 500 ETF (IVV).
- Vanguard S&P 500 ETF (VOO).
- SPDR Portfolio S&P 500 ETF (SPLG).
- Invesco S&P 500 Equal Weight ETF (RSP).
SPDR S&P 500 ETF Trust (SPY)
iShares Core S&P 500 ETF (IVV)
Vanguard S&P 500 ETF (VOO)
SPDR Portfolio S&P 500 ETF (SPLG)
Invesco S&P 500 Equal Weight ETF (RSP)
Compare the best S&P 500 ETFs
| FUND | TICKER | EXPENSE RATIO | TOTAL ASSETS | 30-DAY SEC YIELD |
|---|---|---|---|---|
SPDR S&P 500 ETF Trust
| SPY
| 0.095%
| $547.5 billion
| 1.19%
|
iShares Core S&P 500 ETF
| IVV
| 0.03%
| $491.8 billion
| 1.31%
|
Vanguard S&P 500 ETF
| VOO
| 0.03%
| $473.3 billion
| 1.29%
|
SPDR Portfolio S&P 500 ETF
| SPLG
| 0.02%
| $39.8 billion
| 1.32%
|
Invesco S&P 500 Equal Weight ETF
| RSP
| 0.2%
| $53.8 billion
| 1.73%
|
Methodology
We created our ranking of the best S&P 500 ETFs by applying a screen of several must-have metrics:
- Tracking error. We assessed how much an ETF’s 10-year annualized performance differed from the S&P 500 index’s 10-year annualized return of 11.8% as of Dec. 31, 2023.
- AUM. All the ETFs on this list have accrued at least $1 billion in assets under management. ETFs with a higher AUM tend to have higher trading volume, tighter bid-ask spreads and more popularity.
- Expense ratio. We capped the acceptable expense ratio at 0.2%. The expense ratio is deducted directly from the gross returns of the ETF. Keeping it as low as possible can help an S&P 500 ETF track its benchmark index more closely.
- Management style. All the ETFs on this list replicate the exact holdings of the S&P 500 index and its returns in a passively managed structure. Actively managed ETFs that use the S&P 500 index as an underlying asset were excluded.
This set of criteria allows you to screen for S&P 500 ETFs that are passively managed, have a low cost, incur minimal tracking error and have an established market presence backed by a competent fund manager.
An experienced fund analyst selected the funds above, but they may not be right for your portfolio. Before purchasing any of these funds, do plenty of research to ensure they align with your financial goals and risk tolerance.
Why other S&P 500 ETFs didn’t make the cut
We focused on passively managed S&P 500 ETFs for our ranking. Passively managed S&P 500 ETFs replicate the benchmark index holdings and track its returns as closely as possible.
We excluded actively managed ETFs and factor-based ETFs. These include ETFs that target leveraged, inverse or enhanced income exposure for the S&P 500 index. These also include ETFs that attempt to isolate a particular style of stock, such as value, growth, low volatility or dividend aristocrat, from the S&P 500.
We made this decision after reviewing the latest SPIVA Scorecard from the S&P Dow Jones Indices. The SPIVA scorecard measures the performance of actively managed funds worldwide against their index benchmarks. Roughly 88% of U.S. large-cap funds underperformed the S&P 500 over the last 15 years, as of Dec. 31, 2023.
Actively managed and factor S&P 500 ETFs might have uses if you want to try to outperform the market and generate higher yields or hedge against crashes. But passively managed S&P 500 ETFs provide the best blend of low fees, high diversification, simplicity and transparency. You can capture as much of the S&P 500 index’s returns as possible net of fee with these ETFs.
Final verdict
“ETFs tracking the S&P 500 index can appeal to investors who want broadly diversified exposure to large-cap U.S. stocks with very low costs and high liquidity,” said Michelle Louie, senior portfolio manager at Vanguard’s Equity Index Group.
Our recommendation for the best S&P 500 ETF is the iShares Core S&P 500 ETF due to its ultralow fees, minimal tracking error, strong trading volume and robust assets under management. IVV offers the best value proposition if you’re a long-term buy-and-hold investor who isn’t looking to trade daily or utilize options.
About the S&P 500
The S&P 500 index, established in 1957, is one of the leading benchmarks for U.S. equity performance. It tracks 500 companies, which are weighted by market capitalization. The larger the company, the more significant its weight in the index. The S&P 500 covers about 80% of the domestic U.S. equity market and offers a broad representation of its performance.
A committee chooses the companies for the index. It reviews their size, liquidity and profitability. This process ensures the S&P 500 reflects the performance of the stock market.
How to pick the best S&P 500 ETF
Focus on fees to choose the best S&P 500 ETF. All passive S&P 500 ETFs track the same underlying index. So differences in performance largely can be attributed to varying expense ratios.
You can pick S&P 500 ETFs with higher returns net of fees and lower tracking errors relative to the underlying index by keeping expense ratios low. If fees are equal, consider the ETF provider’s reputation, portfolio turnover rate, AUM and bid-ask spread.
Pros and cons of investing in S&P 500 ETFs
Investing in an S&P 500 ETF has advantages and disadvantages.
Pros
- Ability to capture the returns of a long-standing benchmark index.
- High liquidity means it is easy to buy and sell shares.
- Historically strong returns over long periods of efficiency.
Cons
- Lack of small-cap stocks.
- Lack of international diversification.
- Historically high volatility during bear markets and crashes.
Considering your objectives, risk tolerance and time horizon are key when deciding whether an S&P 500 ETF is right for you.
Ways to invest in the S&P 500
You can invest in the S&P 500 in two main ways:
- Through individual stocks that are included in the S&P 500.
- Through S&P 500 funds.
Experts generally agree the best way to invest in the S&P 500 is through an exchange-traded fund or index fund. While there are differences between these approaches, both offer low costs and diversification.
Frequently asked questions (FAQs)
The S&P 500 is a popular investment due to several factors.
The first is its longevity. The index launched in March 1957 and has since been a barometer of U.S. market performance.
The S&P 500 is also popular due to its high historical returns. On average, the S&P 500 has returned an annualized 10% with dividends reinvested.
Finally, the S&P 500 has been endorsed by many investing icons, including Warren Buffett, who disclosed it as an intended holding for his estate upon his passing.
Blueprint is an independent publisher and comparison service, not an investment advisor. The information provided is for educational purposes only and we encourage you to seek personalized advice from qualified professionals regarding specific financial decisions. Past performance is not indicative of future results.
Blueprint has an advertiser disclosure policy. The opinions, analyses, reviews or recommendations expressed in this article are those of the Blueprint editorial staff alone. Blueprint adheres to strict editorial integrity standards. The information is accurate as of the publish date, but always check the provider’s website for the most current information.
