IVV vs. VOO: The S&P 500 Duel

When it comes to S&P 500 investing, two titans dominate the landscape: IVV from BlackRock and VOO from Vanguard. Both offer identical 0.03% expense ratios and track the same index, yet one commands nearly twice the assets (Yahoo Finance, Yahoo Finance). The difference isn’t in performance—it’s in the details that most investors overlook.

The Ultimate Index Fund Showdown

IVV (iShares Core S&P 500 ETF) launched in 2000 as one of BlackRock’s flagship offerings, becoming a cornerstone of countless portfolios. VOO (Vanguard S&P 500 ETF) arrived a decade later in 2010, yet has amassed significantly more investor assets despite its shorter history.

The question isn’t which performs better—they’re virtually identical. The question is which fits your investment strategy and brokerage setup.

Performance: A Dead Heat

With identical 0.03% expense ratios and the same underlying index, performance differences are negligible (Stock Analysis):

• IVV 10-Year Return: 12.58% annualized
• VOO 10-Year Return: 12.59% annualized
• Difference: 0.01%—essentially statistical noise

Both funds demonstrate exceptional tracking accuracy with minimal tracking error of approximately 0.04% over five years (uSMART). For practical purposes, you’ll get identical returns from either choice.

The Asset Management Mystery

Here’s where things get interesting. Despite launching a decade later, VOO manages $1.33 trillion in assets compared to IVV’s $575.53 billion—a massive 2.3x difference (Composer).

Why VOO’s Dominance?

Factor	Impact
Vanguard Brand Loyalty	Investor-owned structure appeals to cost-conscious investors
Index Fund Pioneer	Vanguard invented the index fund concept
Marketing Focus	Heavy emphasis on low-cost passive investing
Advisor Preferences	Many financial advisors prefer Vanguard’s philosophy

This asset disparity creates interesting implications. VOO’s higher daily trading volume (8.9 million vs 8.2 million shares) provides slightly better liquidity, though both are exceptionally liquid for any practical trading needs.

The Brokerage Advantage: Where Your Choice Matters

The real decision factor often comes down to your brokerage platform:

Choose IVV if you use:

• Fidelity: Commission-free trades for all iShares ETFs (Fidelity iShares)
• Interactive Brokers: Often better pricing for BlackRock products
• Schwab: No preference, but some advisors favor iShares

Choose VOO if you use:

• Vanguard: Commission-free trades and seamless integration
• TD Ameritrade/Schwab: Post-merger, slight preference for Vanguard products
• Robinhood: No commission difference, but Vanguard’s reputation matters

Hidden Income: Securities Lending Edge

Both ETFs engage in securities lending—loaning shares to short sellers for additional income (ETF Database, Morningstar). This practice helps offset the already low 0.03% expense ratio, effectively reducing your true cost.

The subtle advantage: While both participate, the income generated likely benefits both funds similarly. However, the specific revenue isn’t publicly disclosed, making it impossible to determine if one has an edge.

Tax Efficiency: Identical by Design

Both ETFs are structured for maximum tax efficiency:

• Dividend Yield: IVV at 1.39%, VOO at 1.37% (Dividend, Dividend)
• Capital Gains: Minimal distributions due to index structure
• Tax Loss Harvesting: Both suitable for tax optimization strategies

The 0.02% dividend yield difference reflects minor timing variations in dividend payments rather than any structural advantage.

The Track Record Factor

IVV’s 25-year history provides more extensive backtesting data, including performance through:

• Dot-com crash (2000-2002)
• Financial crisis (2008-2009)
• COVID-19 pandemic (2020)
• Multiple market cycles

VOO’s 15-year history covers significant market events but lacks the dot-com era data. For most investors, this historical difference is more psychological comfort than practical advantage.

Which Should You Choose?

The decision framework is surprisingly simple:

Choose IVV if:

• You use Fidelity or prefer BlackRock’s ecosystem
• You value the longer track record for peace of mind
• Your financial advisor recommends iShares products
• You’re indifferent and want the “original” S&P 500 ETF

Choose VOO if:

• You use Vanguard or believe in their investor-owned philosophy
• You prefer the fund with higher assets and liquidity
• You want to align with the index fund pioneer
• You’re influenced by Vanguard’s reputation for putting investors first (Retire Before Dad)

The Surprising Truth

After analyzing expense ratios, performance, liquidity, and structure, the most honest assessment is this: it doesn’t matter which you choose from a returns perspective (The Frugal Expat). Both will deliver virtually identical long-term performance.

The real insight: Your choice should be based on practical considerations—brokerage advantages, existing relationships, and personal philosophy about fund companies—rather than trying to optimize for minimal performance differences that don’t exist.

Building Your Core Holding

Whether you choose IVV or VOO, remember that S&P 500 exposure should anchor—not dominate—your portfolio. Consider complementing either ETF with:

• International developed markets (FTIHX, VEA)
• Emerging markets (VWO, FTEIX)
• Small-cap U.S. stocks (VB, SCHA)
• Bonds (BND, FXNAX)

The Bottom Line

In the battle between IVV and VOO, the real winner is you—the investor. Both offer world-class S&P 500 exposure at rock-bottom costs. Your energy is better spent on asset allocation, consistent investing, and staying the course rather than agonizing over this choice.

Pick the one that fits your brokerage setup, sleep well knowing you’ve made an excellent choice, and focus on the investing habits that actually move the needle: regular contributions, long-term thinking, and ignoring market noise.

The S&P 500 doesn’t care which fund you use to own it—but your future self will thank you for choosing either of these exceptional options and sticking with them through decades of wealth building.

FAQ

Is IVV or VOO better for long-term investing? +

Both IVV and VOO have identical 0.03% expense ratios and track the same S&P 500 Index with nearly identical performance. The choice often comes down to brokerage advantages—Fidelity offers commission-free trades for IVV, while Vanguard does the same for VOO.

Why is VOO more popular than IVV? +

VOO has significantly more assets under management ($1.33 trillion vs IVV's $575.53 billion), suggesting higher investor preference, possibly due to Vanguard's strong reputation in low-cost index investing and their investor-owned structure.

Do IVV and VOO hold the same stocks? +

Yes, both ETFs hold identical stocks as they track the same S&P 500 Index. The main differences are fund provider (BlackRock vs Vanguard), inception dates, and brokerage relationships rather than underlying holdings.

Do IVV and VOO participate in securities lending? +

Yes, both ETFs engage in securities lending to generate additional income, which helps offset their already low 0.03% expense ratios. This practice contributes to their cost efficiency but likely provides similar benefits for both funds.

Which ETF has a longer track record? +

IVV launched in 2000, giving it a decade longer track record than VOO (launched in 2010). However, their performance has been virtually identical since 2010, with historical returns showing negligible differences.

What are the dividend yields for IVV and VOO? +

Both are distributing ETFs that pay quarterly dividends. IVV currently yields 1.39% while VOO yields 1.37%—a minimal difference that reflects the underlying S&P 500 dividend distributions minus fund expenses.

What are the European equivalents of IVV and VOO? +

European investors can access S&P 500 exposure through UCITS-compliant ETFs like iShares Core S&P 500 UCITS ETF (CSPX) or Vanguard S&P 500 UCITS ETF (VUSD), which are structured to comply with European regulations.

How do I choose between IVV and VOO? +

The choice typically depends on your brokerage platform. If you use Fidelity, IVV offers commission-free trades. If you use Vanguard, VOO is commission-free. For other brokers, either option works equally well.

Are IVV or VOO actively managed? +

No, both are passively managed index ETFs that track the S&P 500 through full replication. They hold the same 500 large-cap U.S. companies weighted by market capitalization, with no active stock selection involved.

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Disclaimer: This article is for informational purposes only and does not constitute financial advice. Investing involves risks, including the possible loss of principal. Always conduct your own research before making investment decisions.