Does Vanguard or State Street Have the Better S&P 500 ETF?

Deciding between the Vanguard S&P 500 ETF (NYSEMKT:VOO) and the State Street SPDR S&P 500 ETF (NYSEMKT:SPY) typically involves weighing the Vanguard fund's lower costs against the SPDR trust's slightly higher trading liquidity and its long-standing history.

The S&P 500 serves as the primary benchmark for the United States stock market, representing 500 of the largest and most influential companies. Investors looking for broad equity exposure often choose between VOO and SPY, two massive funds that track the same index but differ slightly in cost, age, and legal structure.

Beta measures price volatility relative to the S&P 500; beta is calculated from monthly returns over the available fund history (up to five years). The 1-yr return represents total return over the trailing 12 months. Dividend yield is the trailing-12-month distribution yield.

The Vanguard fund is significantly more cost-efficient for long-term holders with its 0.03% expense ratio compared to 0.09% for the SPDR trust. Both funds offer a matching 1% dividend yield, as they are capturing the same underlying corporate distributions.

Growth of $1,000 over 5 years (total return)

The Vanguard S&P 500 ETF employs a full-replication indexing approach to track its benchmark, holding 505 stocks in proportions that mirror the index. Its largest positions include Nvidia Corp (NASDAQ:NVDA) at 7.6%, Apple Inc (NASDAQ:AAPL) at 7.1%, and Microsoft Corp (NASDAQ:MSFT) at 5.4%. Sector weights lean toward technology at 37%, financial services at 12%, and communication services at 10%. The fund was launched in 2010. Vanguard S&P 500 ETF has paid $7.35 per share over the trailing 12 months, which on its recent ~$701.0 share price works out to a 1% yield.

The State Street SPDR S&P 500 ETF is a unit investment trust (UIT), a structure that requires full replication and prevents the reinvestment of dividends between distribution dates. This can result in a slight cash drag during bull markets. The trust holds 504 securities, and its top positions include Nvidia at 7.6%, Apple at 7%, and Microsoft at 5.4%. The portfolio reflects the broader market with technology at 37%, financial services at 12%, and communication services at 10%. The fund was launched in 1993. State Street SPDR S&P 500 ETF has paid $7.52 per share over the trailing 12 months, which on its recent ~$762.6 share price works out to a 1% yield.