Table of contents
- What are S&P 500 ETFs?
- Why invest in S&P 500 ETFs?
- Choosing the Right S&P 500 ETF: Key Factors to Consider
- Comparison of S&P 500 ETFs: VOO, SPY, IVV, and SPLG
- VOO vs. SPY vs. IVV vs. SPLG: Which should Singapore investors choose?
- How to Buy S&P 500 ETFs in Singapore
It’s no surprise that investors like S&P 500 ETFs. Owning a slice of the top 500 US companies—including the likes of Amazon, Apple, and Microsoft—in a single investment? That’s a lot of potential growth.
S&P 500 ETFs track the performance of the S&P 500 index, a benchmark of the US stock market. This means that by investing in one of these ETFs, you’re essentially investing in the growth potential of the US economy as a whole.
Whether you’re a seasoned investor or just starting, S&P 500 ETFs can be a valuable addition to your portfolio. Let’s find out how you can decide which S&P 500 ETF you should buy, and take a look at our top picks.
What are S&P 500 ETFs?
S&P 500 ETFs are investment funds that track the performance of the S&P 500 index. They offer a simple and efficient way to gain diversified exposure to the US stock market, representing a basket of 500 leading US companies.
Purchasing an ETF from the S&P 500 would essentially mean owning a small piece of each of those companies.
The S&P 500 is a broad market index that includes 500 of the largest publicly traded companies in the US. It is widely regarded as a benchmark for the overall health and performance of the US stock market.
Because S&P 500 ETFs are designed to track the index, their performance closely mirrors the performance of the S&P 500 itself.
Why invest in S&P 500 ETFs?
Ais a globally recognised and reliable indicator of the US stock market, S&P 500 ETFs are easy options for investors looking for low-risk investments with long-term growth.
Singaporean investors entering the US market can then access 500 of the largest US companies across various sectors, including technology, healthcare, financials, and more.
By playing your hand outside of a localised basket of stocks, you’ll also be able to hedge against local market volatility, providing diversification benefits within a global portfolio.
Choosing the Right S&P 500 ETF: Key Factors to Consider
Expense Ratio
Expense ratios are an important factor when considering an ETF.
A fund with higher fees can significantly impact your total return over time, which may see cheaper funds outperforming their more expensive counterparts in the long run if all other factors remain equal.
Over the long term, even small differences in expense ratios can significantly impact your total returns.
Liquidity
One of the key features of an ETF is its liquidity, allowing investors to quickly and efficiently sell the fund for cash. A more liquid ETF allows investors to quickly buy or sell shares without significantly impacting the market price. This is particularly advantageous for those who engage in frequent trading or need to quickly adjust their portfolio.
Net Assets
The size of an ETF, represented by its net assets or total assets under management, can be an indicator of its popularity and stability. Larger ETFs often have greater liquidity and may be less susceptible to market fluctuations.
Returns and Dividends
Since VOO, SPY, IVV, and SPLG track the same index and have nearly identical holdings, their performance is largely similar. In addition, all four ETFs distribute dividends from their underlying companies on a quarterly basis, making them potentially suitable for income-focused investors.
Performance Consistency
Evaluating the performance consistency and tracking accuracy of an ETF is essential to making informed investment decisions. By examining the historical performance and how closely the ETF tracks its underlying index, investors can gain insights into which S&P 500 ETF to buy.
Number of Holdings
The number of holdings in an ETF can be an important factor to consider, especially in terms of diversification and risk management. A higher number of holdings generally indicates broader diversification, which can help to mitigate risk. However, the specific holdings and their weightings are also crucial to consider.
Now, let’s compare the four most popular S&P 500 ETFs among Singaporean investors: VOO, SPY, IVV, and SPLG.
Comparison of S&P 500 ETFs: VOO, SPY, IVV, and SPLG
S&P 500 ETFs track the S&P 500 index, which is considered to be a bellwether for the US economy. The index holds 500 of the largest US stocks across all industries such as technology, energy, financials, and healthcare.
When you invest in a S&P 500 ETF, you automatically own top stocks like Apple, Tesla, Disney, and Warren Buffett’s Berkshire Hathaway, amongst others. Historically, the average annualised return for the index has been around 10%.
Given the popularity of the S&P 500 index, there are many ETFs tracking it. Here’s a comparison between four of the most popular ones among Singaporeans: VOO (NYSEARCA:VOO), SPY (NYSEARCA:SPY), IVV (NYSEARCA:IVV) and SPLG (NYSEARCA: SPLG).
| Vanguard S&P 500 ETF |
SPDR S&P 500 ETF Trust |
iShares Core S&P 500 ETF |
SPDR Portfolio S&P 500 ETF |
||
|---|---|---|---|---|---|
| General Information | Ticker | VOO | SPY | IVV | SPLG |
| Year of Inception | 2010 | 1993 | 2000 | 2005 | |
| Net Assets (in USD) | 1.41T | 634.08B | 594.08B | 58.66B | |
| Costs | Expense Ratio | 0.03% | 0.09% | 0.03% | 0.02% |
| Performance | 3-Year Returns | 12.51% | 12.45% | 12.52% | 12.52% |
| 5-Year Returns | 16.81% | 16.76% | 16.82% | 16.84% | |
| 10-Year Returns | 12.94% | 12.88% | 12.94% | 12.89% | |
| Dividend Yield | 1.23% | 1.19% | 1.28% | 1.26% | |
| Liquidity | Average Trading Volume | 6.13 mil | 54.64 mil | 6.42 mil | 8.08 mil |
| Holdings | Number of Holdings | 504 | 504 | 504 | 504 |
| Top 10 Holdings (% of total assets) |
34.93% | 34.88% | 36.84% | 34.86% | |
Source: Respective fund websites, Yahoo Finance. As of 20 Mar 2025.
What is VOO: Vanguard S&P 500 ETF (NYSEARCA: VOO)
Overview
VOO is the most popular ETF on Syfe’s Brokerage. It’s offered by Vanguard, the brokerage firm founded by Jack Bogle, who’s considered by many to be the “father of index investing”. Vanguard is currently the world’s largest provider of index funds and they’re known for their very low fund fees.
Expense Ratio
VOO’s expense ratio is just 0.03%. In other words, your annual fee on a $10,000 investment in VOO is only $3!
5-Year Annualised Return
VOO boasts a 5-year annualised return of 16.81%, outperforming the benchmark of 15.31%. This means that by investing in VOO, you would have gained 1.5% more in annual returns compared to the benchmark, adding significant value to your investment over the long term.
Who is it Suitable for?
VOO is best for investors seeking a low-cost, diversified investment in the S&P 500. If you prioritise minimising fees and tracking a well-established index, VOO is a great ETF.
What is SPY: SPDR S&P 500 ETF Trust (NYSEARCA: SPY)
Overview
SPY is the oldest and probably the most well-known S&P 500 ETF. Launched in 1993, it’s offered by State Street Global Advisors. Because of its reputation, it’s traded a lot more frequently compared to VOO and IVV.
Expense Ratio
SPY has an expense ratio of 0.09%—arguably the highest among our four recommendations. So, an investment of $10,000 in SPY would incur an annual fee of $9.
5-Year Annualised Return
SPY’s 5-year annualised return is 16.76%, slightly lower than VOO but still higher than the benchmark of 15.31%. While the return is impressive, the higher expense ratio compared to VOO and IVV might eat into your profits over time.
Who is it Suitable for?
SPY trades 85 million shares on average each day while VOO and IVV each trade less than 5 million. Although this makes SPY more liquid, all four ETFs are so widely traded that the liquidity difference is immaterial for the average investor.
If you prioritise high trading volume and are less concerned about a slightly higher expense ratio, SPY could be a good fit.
What is IVV: iShares Core S&P 500 ETF (NYSEARCA: IVV)
Overview
IVV is offered by iShares, part of the BlackRock family of funds. Like Vanguard and State Street Global Advisors, BlackRock is one of the world’s largest asset managers. Since its inception in 2000, IVV has grown to become one of the largest ETFs in the world, amassing assets of over $446.520 billion.
With an expense ratio of 0.03%, IVV is identical in cost to VOO, making it one of the more affordable ETFs featured here.
Expense Ratio
With an expense ratio of 0.03%, IVV is identical in cost to VOO, making it one of the more affordable ETFs featured here. A $10,000 investment in IVV would also result in an annual fee of only $3.
5-Year Annualised Return
IVV has a 5-year annualised return of 16.82%, marginally outperforming VOO and significantly exceeding the 15.31% benchmark. This strong performance, coupled with its low expense ratio, makes IVV a compelling option.
Who is it Suitable for?
IVV is suitable for cost-conscious investors who want a well-established S&P 500 ETF managed by a reputable firm. If you’re seeking a combination of low fees and strong performance, IVV is a solid choice.
What is SPLG: SPDR Portfolio S&P 500 ETF (NYSEARCA: SPLG)
Like SPY, SPLG is an ETF launched by State Street Global Advisors that tracks the S&P 500. You might be wondering: why would State Street launch an ETF so similar to SPY, one of the biggest funds in the world?
The answer: fees.
Instead of lowering the cost on their existing products, ETF issuers like State Street are launching what are essentially copies of their ETFs with lower fees. This allows them to continue collecting the higher fees on the existing ETFs while providing retail investors a more cost-friendly alternative.
Expense Ratio
SPLG boasts the lowest expense ratio among the four ETFs at just 0.02%. This means that a $10,000 investment in SPLG would only cost you $2 in annual fees.
5-Year Annualised Return
SPLG has the highest 5-year annualised return among the four ETFs at 16.84%, outperforming the benchmark by 1.53%. This impressive return, combined with its low expense ratio, makes SPLG a very attractive option.
Who is it Suitable for?
SPLG is suitable for investors who want the absolute lowest-cost S&P 500 ETF. If you’re highly cost-sensitive and want a fund managed by a well-known provider like State Street, SPLG is an excellent choice.
VOO vs. SPY vs. IVV vs. SPLG: Which Should Singapore Investors Choose?
For most investors, the differences between the four ETFs are minor. They all track the same index, have similar holdings, and largely similar returns.
The primary difference between SPY, VOO, IVV, and SPLG is their cost. Here’s a quick guide to help you choose your S&P 500 ETF based on your investment style:
- Cost-conscious, long-term investments: VOO, IVV, or SPLG are excellent choices due to their low expense ratios, with SPLG edging out at 0.02%.
- Active trading, looking for high liquidity: SPY is the most heavily traded and therefore the most liquid.
- Balanced approach between cost and liquidity: IVV offers a good middle ground with a low expense ratio and decent trading volume.
Ultimately, VOO, SPY, IVV, and SPLG are all great options. As the saying goes, the best time to invest was yesterday. The more important thing is to start investing, instead of spending too much time deciding between the four funds.
However, Singapore investors should also consider a few practicalities:
- Dividend withholding tax: US dividends are subject to a 30% withholding tax for Singapore investors. Explore UCITs ETFs to save 50% on US dividend withholding taxes.
- Foreign currency risk: Fluctuations in the USD exchange rate can impact returns.
- Ease of access: Ensure your brokerage platform offers access to these US-listed ETFs.
How to Buy S&P 500 ETFs in Singapore
You can invest in VOO, SPY, IVV or SPLG through a brokerage platform like Syfe’s Brokerage.
Syfe’s Brokerage makes it easy – and free – to invest in US stocks and ETFs.
- Open a Syfe brokerage account
- Search for your preferred ETF using their ticker symbols
- Enter the amount you want to invest in the ETF.
- Double-check your order details and click “Buy” to place your trade.
On top of the low commission fees, you enjoy free trades each month. Best of all, there’s no platform fee and no hidden fees when you use our brokerage. Syfe Brokerage offers fractional shares, so you can invest with any amount instead of buying a whole share.
New to Syfe? Download the Syfe app to get started and receive S$20 when you sign up using the promo code ‘SYFEPROMO’.
You must be logged in to post a comment.