ETF to Dump No. 1: SPDR S&P 500 (SPY)
The time has come to sell the SPDR S&P 500 (SPY), the granddaddy of all ETFs, even though it may be the most liquid and heavily traded security in the world.
Two other ETFs track the same index as SPY: iShares S&P 500 (IVV) and Vanguard S&P 500 (VOO). Are they any different? Yes, they are. Assuming you want to be in the S&P 500, here are three reasons to avoid SPY.At 0.09%, SPY's expense ratio is 50% higher than VOO, which charges only 0.06%. Vanguard is rarely undersold on fees! VOO can be traded commission-free at Vanguard's brokerage arm, while IVV has no transaction fee for Fidelity customers. Currently, no major brokerage firm offers a fee-free trading program for SPY. The real kicker is dividend payments. Few investors realize it, but SPY can take more than a month to deliver your quarterly dividend check. IVV and VOO both manage to pay out dividends in a week or less. If you are a daytrader, the liquidity of SPY may outweigh these negatives, but for most investors VOO and IVV are better choices.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV