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Anonymous

05 Aug 2019

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General Investing

What are the differences between SPY, VOO, IVV ETFs?

Anyone invested in these US ETFs before? What are the differences between them? Any specific one you would recommend or any tips for them?

Discussion (1)

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In short, no difference.
Beside the obvious that they come from difference issuers, all the 3 ETFs track the same underlying benchmark, the S&P 500 Index.
On an annual basis, SPY charge 0.09%, IVV charge 0.04% and VOO charge 0.03%. For plain vanilla exposure, you should just go with the absolute cheapest, VOO. However, IVV and SPY will be good as well.

As far as their abilities to track the benchmark efficiently (tracking error), all three did an excellent job with minimal or no tracking error over the long run.
All three are highly liquid which will translate to tighter bid-spread though SPY may have a slight edge here since SPY is famed as the trading tool for short-term trader who wants broad beta.

But note that these 3 are listed in the US and are subjected to 30% dividend withholding tax (DWT). This mean that for every 1 dollar of dividend that you received from any US-listed ETF/securities, you will only received 70 cents.

You may want to look at ETFs that are domiciled in Ireland that are listed on the UK exchange (LSE), i believe the DWT is at 15%

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