Investors searching for ways to build wealth through the stock market have two remarkably similar options that deliver identical returns but come packaged quite differently. The Vanguard S&P 500 ETF and the State Street SPDR Portfolio S&P 500 ETF both track the same index, offer nearly matching performance and carry minimal fees. Yet one key distinction makes them appeal to different types of investors.
The funds operate as exchange-traded funds, which allow everyday people to invest in a diversified basket of 500 large American companies without needing to pick individual stocks. Think of them as convenient one-stop shopping for broad market exposure, capturing the performance of corporate giants like Apple, Microsoft and Nvidia all in a single purchase.
Understanding the basics
1. Vanguard S&P 500 ETF (VOO)
This fund has established itself as an industry heavyweight with $1.5 trillion in assets under management. Launched with a 15.2-year track record, VOO charges an annual expense ratio of 0.03%, meaning investors pay just $3 per year for every $10,000 invested. The fund currently trades at approximately $608 per share and holds 505 different stocks across technology, financial services and consumer sectors.
2. State Street SPDR Portfolio S&P 500 ETF (SPYM)
Previously trading under the ticker SPLG until a name change in October 2025, SPYM manages $95 billion in assets. The fund charges a slightly lower expense ratio of 0.02% and trades at roughly $78 per share. With 504 holdings launched in November 2005, it mirrors VOO’s sector allocation and top positions almost exactly.
Performance tells an identical story
Looking at the numbers reveals just how similar these funds really are. Over the past decade, VOO has gained 286.0% while SPYM rose 286.3%. Both delivered average annual returns of 14.5% during that period. Their five-year maximum drawdowns matched at 24.4%, and a $1,000 investment in either fund five years ago would have grown to $1,832 today.
Both funds maintain the same dividend yield of 1.2% and share identical beta scores of 1.00, indicating they move in perfect sync with the broader market. Their top three holdings remain Nvidia, Microsoft and Apple, with technology, financial services and consumer cyclical companies dominating the portfolio mix.
The practical difference that matters
Despite their performance twins status, these funds differ in one meaningful way that affects real-world investing decisions. VOO’s share price hovers around $608, while SPYM trades near $78. This price gap exists simply because of different share counts, not because one fund performs better than the other.
For investors working with limited budgets, this distinction becomes significant. Someone with $1,000 to invest can purchase only one share of VOO with $392 left over. That same investor could buy 12 shares of SPYM and deploy nearly their entire investment amount. The leftover cash makes more difference in smaller portfolios where every dollar counts.
Why share price matters for budget-conscious investors
The lower share price provides more flexibility when building a portfolio with smaller amounts. Investors can more easily adjust their holdings, rebalance their allocations or dollar-cost average into positions without leaving substantial cash sitting idle. This accessibility explains why SPYM’s managers deliberately maintain a lower per-share price point.
However, the difference becomes less important for larger accounts. Whether someone invests $10,000 in VOO or SPYM, they will receive identical returns. The total value matters more than the number of shares purchased.
Considering other factors
VOO’s massive size brings advantages in trading volume and liquidity. With more than 15 times the assets of SPYM, VOO sees heavier daily trading activity, potentially meaning tighter bid-ask spreads for large transactions. For most retail investors making modest purchases, this distinction remains negligible.
The one-basis-point difference in expense ratios also amounts to minimal real-world impact. On a $10,000 investment, SPYM saves investors $1 annually compared to VOO. Over decades, these small savings compound, but neither fund’s fees meaningfully drag on returns.
Making the choice
Both funds serve as effective core portfolio holdings for anyone seeking broad American stock market exposure. VOO suits investors who value the reputation and scale of an established industry leader. SPYM appeals to those beginning their investing journey with smaller amounts or those who prefer tighter portfolio management through lower-priced shares.
The key takeaway remains simple. These funds deliver the same returns, track the same index and hold the same companies. The choice comes down to personal preference and practical considerations around share price rather than any meaningful performance difference. For building long-term wealth through low-cost index investing, either option provides a solid foundation.
Investment information and data sourced from The Motley Fool
