SPY vs IVV

Discuss all general (i.e. non-personal) investing questions and issues, investing news, and theory.
Post Reply
Horsefly
Posts: 297
Joined: Sat Oct 24, 2015 8:13 am
Location: Colorado, mostly

SPY vs IVV

Post by Horsefly » Tue Jun 26, 2018 12:55 pm

I have a pretty sizeable holding in SPY, across my taxable and traditional IRA. I've been watching SPY vs IVV (Blackrock's S&P 500 EFT) for a while now, as I was thinking about moving some / most from SPY to IVV, since IVV has about half the ER and a slightly smaller tracking error than SPY. I don't have any firm statistics, but as I watched the two periodically I'd see that if the market was down IVV was slightly less down (maybe a few one-hundredths of a percent), and if the market was up it was slightly up more. Not always, but generally. I mostly figured that might just be the difference in ER.

Then today happened, and I'm wondering if someone can explain. At one point this morning IVV was down about 0.25%, and SPY was up about 0.25%. As I type this, IVV is up 0.02%, and SPY is up 0.47%. I've probably checked these two a couple of dozen times this calendar year, and they have never been more than a couple of hundredths apart.

Anyone know the clue?

livesoft
Posts: 62776
Joined: Thu Mar 01, 2007 8:00 pm

Re: SPY vs IVV

Post by livesoft » Tue Jun 26, 2018 1:05 pm

One of them probably went ex-dividend today.
Wiki This signature message sponsored by sscritic: Learn to fish.

Horsefly
Posts: 297
Joined: Sat Oct 24, 2015 8:13 am
Location: Colorado, mostly

Re: SPY vs IVV

Post by Horsefly » Tue Jun 26, 2018 1:20 pm

livesoft wrote:
Tue Jun 26, 2018 1:05 pm
One of them probably went ex-dividend today.
Ugh. I thought I had checked that. Good catch on your part, rookie mistake on my part. Thanks livesoft!

livesoft
Posts: 62776
Joined: Thu Mar 01, 2007 8:00 pm

Re: SPY vs IVV

Post by livesoft » Tue Jun 26, 2018 1:21 pm

I could be wrong. You have to check. Sometimes ETF sponsors (like Vanguard) are not forthcoming with information.
Wiki This signature message sponsored by sscritic: Learn to fish.

Horsefly
Posts: 297
Joined: Sat Oct 24, 2015 8:13 am
Location: Colorado, mostly

Re: SPY vs IVV

Post by Horsefly » Tue Jun 26, 2018 1:23 pm

livesoft wrote:
Tue Jun 26, 2018 1:21 pm
I could be wrong. You have to check. Sometimes ETF sponsors (like Vanguard) are not forthcoming with information.
No, I did check when I read your first post. IVV went ex-dividend today.

User avatar
vineviz
Posts: 2005
Joined: Tue May 15, 2018 1:55 pm

Re: SPY vs IVV

Post by vineviz » Tue Jun 26, 2018 1:23 pm

livesoft wrote:
Tue Jun 26, 2018 1:05 pm
One of them probably went ex-dividend today.
This is likely the case.

And there is absolutely no long-term difference in the behavior of these two ETFs. Over the past 18 years the difference in compound return is only 3 bps, and in any given month its about 50/50 for one to return more than the other.

My advice: stop imagining that the grass is greener on the other side of the ETF fence.
"Far more money has been lost by investors preparing for corrections than has been lost in corrections themselves." ~~ Peter Lynch

MidwestMike
Posts: 51
Joined: Fri Jun 30, 2017 10:12 pm

Re: SPY vs IVV

Post by MidwestMike » Tue Jun 26, 2018 1:28 pm

SPY 0.09%
IVV 0.07%
VOO 0.05%

Click here for comparison article.

Horsefly
Posts: 297
Joined: Sat Oct 24, 2015 8:13 am
Location: Colorado, mostly

Re: SPY vs IVV

Post by Horsefly » Tue Jun 26, 2018 1:41 pm

MidwestMike wrote:
Tue Jun 26, 2018 1:28 pm
SPY 0.09%
IVV 0.07%
VOO 0.05%

Click here for comparison article.
That article looks to be a bit over 3 years old. According to the research quote I get on Fidelity, the Net ER on IVV is now 0.04%. SPY is 0.0945%.

Also, IVV is able to payout / reinvest dividends very quickly, whereas the trust structure of SPY requires them to hold the dividends in cash for close to 6 weeks before it is paid out.

MidwestMike
Posts: 51
Joined: Fri Jun 30, 2017 10:12 pm

Re: SPY vs IVV

Post by MidwestMike » Tue Jun 26, 2018 1:44 pm

I missed the article date. Just checked VOO on Vanguard’s site and it is currently 0.04%.

User avatar
vineviz
Posts: 2005
Joined: Tue May 15, 2018 1:55 pm

Re: SPY vs IVV

Post by vineviz » Tue Jun 26, 2018 3:28 pm

Horsefly wrote:
Tue Jun 26, 2018 1:41 pm
MidwestMike wrote:
Tue Jun 26, 2018 1:28 pm
SPY 0.09%
IVV 0.07%
VOO 0.05%

Click here for comparison article.
That article looks to be a bit over 3 years old. According to the research quote I get on Fidelity, the Net ER on IVV is now 0.04%. SPY is 0.0945%.

Also, IVV is able to payout / reinvest dividends very quickly, whereas the trust structure of SPY requires them to hold the dividends in cash for close to 6 weeks before it is paid out.
Look at the huge difference that would make when compounded over seven and a half years.

Image
"Far more money has been lost by investors preparing for corrections than has been lost in corrections themselves." ~~ Peter Lynch

Horsefly
Posts: 297
Joined: Sat Oct 24, 2015 8:13 am
Location: Colorado, mostly

Re: SPY vs IVV

Post by Horsefly » Tue Jun 26, 2018 3:51 pm

Yep, no doubt. I do think the ER on IVV has come down more recently, but the more important thing: On the scale of what I have invested in the S&P 500, it's real money. I'm not asking for your approval (I don't even know if/when I will make any change), and I'm certainly not trying to get you to do something you don't want to.

User avatar
vineviz
Posts: 2005
Joined: Tue May 15, 2018 1:55 pm

Re: SPY vs IVV

Post by vineviz » Tue Jun 26, 2018 4:46 pm

Horsefly wrote:
Tue Jun 26, 2018 3:51 pm
Yep, no doubt. I do think the ER on IVV has come down more recently, but the more important thing: On the scale of what I have invested in the S&P 500, it's real money. I'm not asking for your approval (I don't even know if/when I will make any change), and I'm certainly not trying to get you to do something you don't want to.
You should obviously do what you think is right for your portfolio.

My goal is state, for the record, that there is no scale at which the difference between the performance of IVV and SPY amounts to "real money": there is no statistically significant difference in their historical returns. In any given month, for the past 209 months, there's literally a 50/50 chance that IVV would have outperformed SPY.

Even if you accept the minuscule difference in historical returns as likely to persist, a hypothetical investment of $1,000,000 in IVV instead of SPY creates a difference in return that wouldn't cover a weekly trip to Starbucks.
"Far more money has been lost by investors preparing for corrections than has been lost in corrections themselves." ~~ Peter Lynch

User avatar
Earl Lemongrab
Posts: 5635
Joined: Tue Jun 10, 2014 1:14 am

Re: SPY vs IVV

Post by Earl Lemongrab » Wed Jun 27, 2018 1:13 pm

I have a lot in S&P 500 funds, mostly IVV with some in the 401(k). I had a little bit of VOO earlier, but did a TLH to IVV. I ain't fraid of no wash sales.
This week's fortune cookie: "Your financial life will be secure and beneficial." So I got that going for me, which is nice.

Post Reply