An S&P 500 ETF is one of the simplest ways to invest in the U.S. stock market. These funds are designed to track the S&P 500 Index, which represents about 80% of the total U.S. equity market by capitalization, according to S&P Dow Jones Indices. For many investors, an S&P 500 ETF serves as a long-term core holding rather than a short-term trade.
Because multiple ETFs track the same index, the key differences come down to cost, structure, liquidity and tax efficiency.
Here’s a data-driven look at the best S&P 500 ETFs to consider, using primary fund disclosures and index provider data.
At a Glance: Best S&P 500 ETFs
ETF Ticker Expense Ratio Risk Profile Why It Stands Out Vanguard S&P 500 ETF VOO 0.03% Market risk Industry-leading low costs SPDR S&P 500 ETF Trust SPY 0.09% Market risk Most liquid S&P 500 ETF iShares Core S&P 500 ETF IVV 0.03% Market risk Tax-efficient ETF structure Schwab S&P 500 Index Fund SWPPX 0.02% Market risk Lowest expense ratio option Fidelity ZERO Large Cap Index FNILX 0.00% Market risk No expense ratio Expense ratios shown are based on current fund prospectuses and may change.
What Is the S&P 500 and Why ETFs Track It
The S&P 500 Index includes 500 of the largest publicly traded U.S. companies across all major industries.
According to S&P Dow Jones Indices, the index has delivered long-term average annual returns of roughly 10% before inflation, making it a foundational benchmark for retirement and long-term investing.
ETFs that track the index aim to replicate its performance by holding the same companies in similar weightings, offering instant diversification in a single investment.
Best S&P 500 ETFs To Consider
Vanguard S&P 500 ETF (VOO)
VOO is widely used by long-term investors due to its ultra-low expense ratio of 0.03%, according to Vanguard’s official fund profile. That means you pay $3 annually for every $10,000 invested. The ETF structure allows for tax efficiency, making it well-suited for taxable brokerage accounts.
SPDR S&P 500 ETF Trust (SPY)
SPY is the oldest and most actively traded S&P 500 ETF. According to State Street Global Advisors, SPY consistently leads all ETFs in average daily trading volume, which benefits investors who trade frequently or use options. Its higher expense ratio makes it less attractive for pure buy-and-hold strategies.
iShares Core S&P 500 ETF (IVV)
IVV matches VOO’s 0.03% expense ratio, according to BlackRock’s fund disclosures, while offering strong tax efficiency due to its ETF structure. It is often favored by investors who want Vanguard-level costs without using Vanguard as a provider.
Schwab S&P 500 Index Fund (SWPPX)
SWPPX is technically a mutual fund rather than an ETF, but it tracks the same index and carries a 0.02% expense ratio, according to Charles Schwab’s fund overview. It is attractive for investors using Schwab accounts who invest through automatic contributions rather than intraday trading.
Fidelity ZERO Large Cap Index (FNILX)
FNILX charges no expense ratio, according to Fidelity Investments. Instead of tracking the official S&P 500 Index, it follows Fidelity’s proprietary large-cap index, which closely mirrors S&P 500 performance. The trade-off is that it can only be held within Fidelity accounts.
How Much Can Fees Really Matter?
Expense ratios may look small, but they compound over time. According to the U.S. Securities and Exchange Commission, a 1% annual fee can reduce total investment returns by tens of thousands of dollars over a multi-decade investing horizon.
This is why long-term investors often prioritize low-cost index ETFs when building retirement or taxable portfolios.
Risks To Keep in Mind
While S&P 500 ETFs are diversified, they are not risk-free. Because the index is weighted toward large technology companies, sector concentration can increase volatility during market downturns. Additionally, these funds fully participate in market declines, as noted by S&P Global.
S&P 500 ETFs are best suited for investors with a long-term time horizon who can tolerate market fluctuations.
Final Take to GO
There is no single best S&P 500 ETF for everyone. Investors focused on long-term growth and low fees often gravitate toward VOO or IVV, while active traders may prefer SPY’s liquidity.
If you want the lowest possible cost and already use Schwab or Fidelity, their index funds may make sense. The most important factor is consistency — owning a low-cost fund and staying invested over time.
Best S&P 500 ETF FAQ
- What is the cheapest S&P 500 ETF?
- Several S&P 500 ETFs have expense ratios as low as 0.03%, while some mutual fund versions charge even less.
- Is an S&P 500 ETF good for beginners?
- Yes, S&P 500 ETFs offer broad diversification and low costs, making them popular with beginner investors.
- What is the difference between SPY and VOO?
- SPY offers higher liquidity for trading, while VOO has a lower expense ratio for long-term investing.
- Can you lose money in an S&P 500 ETF?
- Yes, S&P 500 ETFs can decline during market downturns, though they have historically recovered over long periods.
- Should an S&P 500 ETF be a core holding?
- Many investors use an S&P 500 ETF as a core portfolio holding due to its broad market exposure.
Information is accurate as of Jan. 20, 2026.
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