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.