Best S&P 500 Index Funds: VOO, IVV and FXAIX Compared

Best S&P 500 Index Funds: VOO, IVV and FXAIX Compared

If you have decided to invest in the S&P 500 — one of the most sound long-term investment decisions available to everyday investors — your next step is choosing which fund to use. Three options dominate the conversation: the Vanguard S&P 500 ETF (VOO), the iShares Core S&P 500 ETF (IVV), and the Fidelity 500 Index Fund (FXAIX). All three track the same index. All three charge near-zero fees. All three have delivered virtually identical long-term returns. Yet the differences between them are real and worth understanding before you commit. This guide gives you the complete picture with verified, current data.

Why These Three Funds Dominate

VOO, IVV, and FXAIX collectively hold trillions of dollars in investor assets — making them among the largest investment funds in the world by any measure. VOO managed approximately $1.51 trillion in assets as of early 2026. IVV held approximately $582 billion. FXAIX held approximately $670 billion. Their scale reflects decades of investor trust and the compounding effect of low costs on long-term wealth building.

All three track the S&P 500 — the index of the 500 largest publicly traded companies in the United States, weighted by market capitalization. The index includes companies like Apple, Microsoft, Nvidia, Amazon, and Alphabet, which together make up a significant portion of each fund’s total value.

Side-by-Side Comparison

	VOO	IVV	FXAIX
Issuer	Vanguard	BlackRock iShares	Fidelity
Fund type	ETF	ETF	Mutual fund
Expense ratio	0.03%	0.03%	0.015%
Annual cost per $10,000	$3.00	$3.00	$1.50
Minimum investment	~1 share or $1 fractional	~1 share or $1 fractional	$0
10-year annualized return	15.61%	15.61%	15.63%
Dividend yield (TTM)	~1.05%	~1.08%	~1.03%
Dividend frequency	Quarterly	Quarterly	Quarterly
Assets under management	~$1.51 trillion	~$582 billion	~$670 billion
Tax efficiency	High (ETF structure)	High (ETF structure)	Moderate (mutual fund)
Brokerage availability	Any broker	Any broker	Fidelity only
Tradable intraday	Yes	Yes	No

VOO — Vanguard S&P 500 ETF

VOO is the most widely held S&P 500 ETF in the world by total assets and arguably the most recognizable name in passive investing. It is managed by Vanguard, the fund company founded by John Bogle — the man widely credited with inventing the index fund and championing low-cost investing for everyday Americans.

Its 0.03% expense ratio means you pay $3 per year for every $10,000 invested. Its 10-year annualized return of 15.61% reflects the performance of the underlying S&P 500 index, which it tracks with exceptional accuracy. Its ETF structure gives it the tax efficiency advantages discussed in our ETF vs index fund guide — namely, that it rarely distributes capital gains to shareholders, making it particularly suitable for taxable brokerage accounts.

VOO can be purchased at any major brokerage — Fidelity, Schwab, TD Ameritrade, Robinhood, and others — and is fully portable between platforms. Fractional shares are available at most brokers, allowing investors to start with as little as $1. Dividends are paid quarterly.

The main consideration is that VOO’s management company, Vanguard, operates with an unusual investor-owned structure — its fund investors are effectively the owners of the company itself. This structure is designed to align Vanguard’s interests with its investors’ interests over the long term, which is part of why it has consistently offered some of the lowest expense ratios in the industry.

Best for: Investors at any brokerage who want the most trusted S&P 500 ETF with maximum portability and Vanguard’s investor-aligned ownership structure.

IVV — iShares Core S&P 500 ETF

IVV is managed by BlackRock through its iShares ETF brand — the largest asset manager in the world. It tracks the same S&P 500 index as VOO with the same 0.03% expense ratio and has delivered virtually identical long-term returns. The correlation between IVV and VOO is 1.00, meaning they move in near-perfect lockstep. Choosing between them based on performance or cost is essentially impossible because the differences are immeasurable over time.

IVV holds 503 companies, has a 25-year track record dating back to 2000, and offers a slightly higher trailing dividend yield of approximately 1.08% compared to VOO’s 1.05%. Like VOO, it is available at any major brokerage and is fully portable between platforms.

The practical reason an investor might choose IVV over VOO is institutional or brokerage-specific. Some brokers offer commission-free trading on iShares ETFs as part of their platform partnerships, which may marginally favor IVV depending on where you hold your account. For most individual investors, this distinction is inconsequential.

Best for: Investors who prefer BlackRock’s institutional backing or whose brokerage has a specific commission-free arrangement with iShares.

FXAIX — Fidelity 500 Index Fund

FXAIX is the only mutual fund in this comparison, which creates meaningful structural differences from VOO and IVV despite tracking the same index. Its expense ratio of 0.015% — half that of VOO and IVV — makes it the cheapest of the three in terms of annual cost, charging $1.50 per year per $10,000 invested.

Its 10-year annualized return of 15.63% is marginally higher than VOO’s 15.61% — a difference driven almost entirely by its lower expense ratio. In absolute terms, the return difference is negligible. But on large balances over long periods, even a 0.015% expense ratio difference compounds into real money. Over 30 years at 7% growth, the 0.015% difference on a $200,000 portfolio is approximately $1,800 in additional compounding — meaningful, though not decisive for most investors.

The key limitation of FXAIX is its exclusivity. It is a Fidelity mutual fund available only through Fidelity accounts and cannot be transferred to another brokerage. If you ever want to move your investment to Schwab, Vanguard, or another platform, you would need to sell your FXAIX shares first — a potentially taxable event in a non-retirement account. It also trades only once per day at market close rather than intraday like an ETF, which matters more to active traders than to long-term passive investors.

Best for: Investors who already use Fidelity or plan to keep their account at Fidelity long-term, and who want the lowest possible expense ratio on an S&P 500 fund.

The Honest Verdict

For long-term passive investors, choosing between VOO, IVV, and FXAIX is genuinely one of the least consequential investment decisions you can make. Their underlying portfolios are essentially identical. Their returns over any meaningful time period differ by rounding errors. Their costs are all extraordinarily low.

The right choice comes down to two practical factors. First, which brokerage do you use or plan to use? If you are at Fidelity, FXAIX’s slightly lower expense ratio and seamless integration make it the natural choice. If you are anywhere else, VOO and IVV are equally excellent. Second, do you care about tax efficiency in a taxable account? Both VOO and IVV have the ETF structure that minimizes capital gains distributions, giving them a slight edge over FXAIX in that specific context.

Pick any of the three, invest consistently, and hold for the long term. The fund you choose matters far less than the discipline with which you invest in it.

Investment Disclaimer: This article is for informational purposes only and does not constitute investment, financial, or tax advice. Investing involves risk, including the possible loss of principal. Past performance does not guarantee future results. Consult a qualified financial advisor before making any investment decisions. FinanceRP may earn a commission through affiliate links on this page, at no extra cost to you.