SPY, VOO and IVV track the S&P 500 index while VTI tracks the CRSP US Total Market imdex. So before comparing the above 4 ETFs, let's talk about the purpose.
Liquidity
Liquidity is important if you trade frequently or if you do hedge or arbitrage
trading using options or futures. The higher the liquidity, or the more
people are trading, the smaller the bid-ask spread.
Every instant buy and sell is a lost equal to the bid-ask spend. For example,
if you buy IVV for $400 and sell for $399.99 because of the bid-ask spread,
you lose $0.01 instantly.
Therefore, if you trade frequently, you want the big-ask spread s to be as
small as possible, which could happen of more people are trading the same
thing, making it more liquid.
Which has the best liquidity?
Below are average trading volumes of the 4 ETFs looked up on June 11, 2022
from Yahoo Finance:
- SPY: 98,572,973
- IVV: 6,249,858
- VOO: 5,574,242
- VTI: 4,552,885
SPY beats the other 3 in a great number. I would say a lot more people are
trading S&P 500 options or futures with SPY as the underliying assets,
which is why SPY, despite its higher expense ratio, keeps being one of the
most traded ETFs.
Who is the oldest?
If the age of ETF matters to you, you would need to look at which of the 4
ETFs was founded the easiest. Sometimes we want to know if an ETF has a
constant behavior through different market conditions such as interest rates,
US Dollar index, commodity prices, CPI data or any other macro-economic
factors.
- SPY was founded on January 22, 1993.
- IVV was founded on May 15, 2000.
- VOO was founded on September, 7, 2010.
- VTI was founded on April 27, 1992.
Best Performance
In terms of performance, VTI beats VOO. VOO beats IVV and IVV beats SPY.
SPY and IVV
- Comparison data: 2000-05-19 to 2022-05-27
- Comparison app: Performance Comparison Between SPY and IVV
- Investment Duration: 252 days which is the average trading days in a year
- IVV beats SPY by 0.021%
VOO and IVV
- Comparison data: 2010-09-09 to 2022-05-27
- Comparison app: Performance Comparison Between VOO and IVV
- Investment Duration: 252 days which is the average trading days in a year
- VOO beats IVV by 0.015%
SPY and VTI
- Comparison data: 2001-06-15 to 2022-05-20
- Comparison app: Performance Comparison Between SPY and VTI
- Investment Duration: 252 days which is the average trading days in a year
- VTI beats SPY by 0.641%
Annual Return Distribution and Sharpe Ratio for SPY and VTI
The following data is based on investment span from 2001/6/15 to 2022/6/15 with dividend reinvested.
SPY
VTI
Conclusion
Liquidity-wise, SPY is the best for those who do frequent short-term trading. In terms of returns of S&P500 tracking ETFs, VOO is better than IVV which is better than SPY. The return difference between SPY and IVV could be the result of their expense ratio of 0.0645%. VOO is relative young, although VOO beats IVV, whether this holds true in the long run is still needed to watched.
VTI beats SPY in a significant amount, which could be the result of the fact that VTI holds US small-cap stocks which provide better growth. However, VTI's returns fluctuate more than SPY's returns.
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