Published on: 2025-05-08
Updated on: 2026-01-08
Investing in an S&P 500 ETF is one of the simplest and most effective ways to gain exposure to the US stock market. But with dozens of S&P 500 ETFs available, how do you choose the best one for your portfolio?
The answer often lies in a careful comparison of performance and fees. In this guide, we compare the best S&P 500 ETFs for 2026, helping you find the right balance between cost and long-term returns.
S&P 500 ETFs track the performance of the S&P 500 index, which includes 500 of the largest publicly traded companies in the US. These funds offer instant diversification, low management costs, and a long history of strong returns-averaging about 10% annually over nearly 90 years.
For most investors, holding a single S&P 500 ETF can serve as the core of a long-term investment strategy.
While all S&P 500 ETFs aim to mirror the index, they can differ in:
Expense ratio: The annual fee charged by the fund, expressed as a percentage of assets.
Tracking error: How closely the ETF matches the performance of the S&P 500.
Liquidity: How easily you can buy or sell shares.
Dividend policy: Whether the ETF distributes dividends or reinvests them.
Over time, even small differences in fees can significantly affect your investment returns.
| ETF | Expense Ratio | 3-Year Annualised Return | Key Takeaway |
|---|---|---|---|
| SPDR Portfolio S&P 500 ETF (SPLG) | 0.02% | ~11.9% | Lowest-cost S&P 500 ETF; strongest long-term cost efficiency |
| iShares Core S&P 500 ETF (IVV) | 0.03% | ~11.8% | Large scale, tight tracking, reliable core holding |
| Vanguard S&P 500 ETF (VOO) | 0.03% | ~11.7% | Low-cost exposure with Vanguard’s long-term structure |
Here's a comparison of the best S&P 500 ETFs, focusing on their expense ratios and recent performance:
Expense ratio: 0.02%
Performance: ~11.9% 3-year annualised return (through end-2025)
Overview: SPLG has become the lowest-cost S&P 500 ETF, overtaking traditional leaders on fees while maintaining tight index tracking and strong liquidity. Asset growth over the past two years has improved trading spreads, making SPLG the most cost-efficient long-term choice for broad U.S. equity exposure in 2026.
Expense ratio: 0.03%
Performance: ~11.8% 3-year annualised return
Overview: IVV remains one of the largest and most liquid S&P 500 ETFs, offering close index tracking and operational stability. While no longer the cheapest option, it remains a high-quality core holding for investors who value scale and consistency.
Expense ratio: 0.03%
Performance: ~11.7% 3-year annualised return
Overview: VOO continues to deliver performance virtually identical to the S&P 500 at a low cost. Vanguard’s structure and long-term investor orientation remain strengths, though its fee advantage has been neutralised by newer, cheaper competitors.
Beyond the “big three,” there are other options with unique features:
Invesco S&P 500 Equal Weight ETF (RSP): Weights all S&P 500 companies equally, rather than by market cap. This can boost returns in years when smaller companies outperform, but it comes with a higher expense ratio (0.20%-0.35%).
Dividend-Focused S&P 500 ETFs: Funds like the ProShares S&P 500 Dividend Aristocrats ETF (NOBL) target companies with a strong record of dividend growth, appealing to income-focused investors.
The difference between a 0.02% and 0.03% expense ratio may seem small, but it adds up over time. For every $10,000 invested:
SPDR Portfolio S&P 500 ETF: 0.02%
iShares Core S&P 500 ETF: 0.03%
Vanguard S&P 500 ETF: 0.03%
Over decades, these savings compound, boosting your total returns.
Recent performance among the leading S&P 500 ETFs remains nearly indistinguishable, reflecting that they all track the same underlying index. Annual return differences are typically well below 0.1%, driven mainly by expense ratios and minor tracking variations, not portfolio construction.
In 2024, for example, SPDR Portfolio S&P 500 ETF, iShares Core S&P 500 ETF, and Vanguard S&P 500 ETF each delivered returns of roughly 32.5%–32.7%, closely mirroring the S&P 500’s strong advance that year. SPDR S&P 500 ETF Trust finished marginally behind, with the difference attributable almost entirely to its higher expense ratio.
The key takeaway for investors in 2026 is that performance dispersion is structural, not strategic. Over short periods, returns appear identical. Over long horizons, even a one-basis-point fee advantage compounds into a measurable edge.
For the lowest fees, SPDR Portfolio S&P 500 ETF is the clear leader in 2026, with a 0.02% expense ratio. It undercuts all major competitors while delivering identical S&P 500 exposure.
For liquidity and trading, SPDR S&P 500 ETF Trust remains unmatched for trading volume and options depth. It is the preferred vehicle for active traders and large, tactical allocations despite its higher fee.
For long-term investors, SPDR Portfolio S&P 500 ETF, iShares Core S&P 500 ETF, and Vanguard S&P 500 ETF are all suitable core holdings. SPLG’s lower expense ratio gives it a modest but persistent edge over multi-decade horizons.
For alternative approaches, investors seeking different risk or income profiles may look beyond market-cap-weighted funds to equal-weight or dividend-focused S&P 500 ETFs. These can alter exposure and volatility characteristics while remaining within the same index universe.
The SPDR Portfolio S&P 500 ETF is the cheapest S&P 500 ETF in 2026, with an expense ratio of 0.02%. It offers full market-cap-weighted exposure to the S&P 500 at the lowest ongoing cost currently available.
Over short periods, performance differences are minimal because all S&P 500 ETFs track the same index. Over longer horizons, however, expense ratios and tracking efficiency create small but persistent performance gaps. Lower-fee ETFs tend to outperform marginally over time.
Yes. SPDR Portfolio S&P 500 ETF uses full physical replication, holding the underlying S&P 500 constituents rather than relying on derivatives. It has consistently tracked the index with minimal tracking error, and its rapid asset growth in recent years has materially improved secondary-market liquidity and bid-ask spreads.
For most long-term investors, SPLG is the most cost-efficient choice in 2026 due to its lower expense ratio. IVV and VOO remain excellent alternatives for investors who prioritise scale, brand familiarity, or alignment with their existing portfolio.
The SPDR S&P 500 ETF Trust is best suited for active trading. It has the highest trading volume, deepest options market, and tight intraday spreads, although its higher expense ratio makes it less attractive for buy-and-hold strategies.
The best S&P 500 ETFs (SPDR) Portfolio S&P 500 ETF, iShares Core S&P 500 ETF, Vanguard S&P 500 ETF, and SPDR S&P 500 ETF Trust all provide reliable exposure to the U.S. stock market.
In 2026, the S&P 500 ETF landscape is clearly tiered. SPDR Portfolio S&P 500 ETF now leads on cost efficiency; iShares Core S&P 500 ETF and Vanguard S&P 500 ETF remain strong, low-fee core options; and SPDR S&P 500 ETF Trust continues to dominate on trading liquidity.
For most long-term investors, prioritising the lowest sustainable fees while ensuring adequate liquidity remains the most effective way to maximise compounded returns over time.
Disclaimer: This material is for general information purposes only and is not intended as (and should not be considered to be) financial, investment, or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by EBC or the author that any particular investment, security, transaction, or investment strategy is suitable for any specific person.
