If you have started researching how to invest in the S&P 500, you have probably run into the same alphabet soup everyone does: VOO, SPY, IVV, SPLG. They all track the same 500 large US companies, their charts look almost identical, and yet investors keep asking which one to actually buy. The honest answer is that the differences are small - but for a long-term investor they compound, and a couple of them matter more if you are investing from Latin America rather than from the United States.
This guide breaks down the four most-searched S&P 500 ETFs side by side: what each one costs, how the share price affects small accounts, where the fund is legally based, and how that last point changes the tax you pay on dividends. No hype, no "best ETF ever" - just the trade-offs so you can pick the one that fits how you invest.
First, what are these four funds actually tracking?
All four are index funds that aim to replicate the S&P 500, an index of roughly 500 of the largest publicly traded US companies - names like Apple, Microsoft, Nvidia and Amazon. When you buy one share of any of these ETFs, you own a tiny slice of all of those companies at once. That is the whole appeal: instant diversification across the US market in a single, low-cost purchase.
Because they follow the same index, their long-term returns are nearly identical before costs. So the real decision is not "which fund performs best" - it is "which fund is cheapest, easiest to buy, and most tax-efficient for my situation." Three levers decide that: the expense ratio, the share price, and the fund's domicile.
The expense ratio: how much each fund quietly charges
The expense ratio is the annual fee the fund charges you, expressed as a percentage of your investment. A 0.03% expense ratio means you pay roughly 3 US dollars a year for every 10,000 dollars invested. It is deducted automatically from the fund, so you never see a bill - but over decades it is one of the few things you can actually control.
The pattern is clear. SPLG, VOO and IVV all sit at or near the bottom of the cost range, while SPY - the oldest and most heavily traded S&P 500 ETF - charges noticeably more. SPY is popular with professional traders precisely because it is so easy to trade in huge volume, but for a buy-and-hold investor that higher fee is money left on the table. If cost is your only concern, the cheapest three are effectively a tie.
Share price: why it matters for a small account
These funds trade at very different price points per share, even though the underlying index is the same. SPY and VOO trade at several hundred dollars per share, while SPLG is designed to trade at a much lower price - often under 100 dollars. For an investor putting in large sums, this is irrelevant. For someone investing 50 or 100 dollars at a time, it matters.
If your broker does not offer fractional shares, a high share price can force you to leave cash uninvested until you have enough to buy a whole share. A lower-priced ETF like SPLG lets you put more of your money to work immediately. Many brokers now support fractional shares, which neutralizes this issue - so before you choose based on price, check whether your broker lets you buy fractions.
The part most guides skip: domicile and dividend taxes
This is where investing from Latin America changes the math. VOO, SPY, IVV and SPLG are all domiciled in the United States. That means when they pay dividends, the US generally withholds tax at source - commonly 30% for foreign investors, unless a tax treaty lowers it. Most LATAM countries do not have a treaty with the US that reduces this rate, so a chunk of your dividends can disappear before it ever reaches your account.
There is also an estate-tax angle that rarely gets mentioned: US-domiciled assets above a certain threshold can be exposed to US estate tax for non-resident foreign holders. For these reasons, some LATAM investors prefer an equivalent fund domiciled in Ireland - for example an Ireland-domiciled S&P 500 ETF, which typically faces a reduced 15% dividend withholding at the fund level thanks to the US-Ireland tax treaty. The trade-off is that these funds can be harder to access on some local brokers and may have slightly higher costs.
Tax rules are personal and country-specific. Withholding rates, treaties and reporting obligations differ across Mexico, Colombia, Chile, Peru and Brazil, and they can change. Treat this as a starting point for your own research or a conversation with a local tax professional, not as a ruling on your specific case.
So which S&P 500 ETF should you choose?
For a long-term investor who simply wants low-cost US market exposure, VOO and IVV are the sensible default: rock-bottom expense ratios, enormous size, and broad availability on the brokers LATAM investors typically use. SPLG does the same job at an even lower share price, which helps if you invest small amounts and your broker lacks fractional shares.
SPY makes the most sense for active traders who value its liquidity, not for someone dollar-cost-averaging over 20 years. And if the dividend-tax drag concerns you, it is worth researching an Ireland-domiciled S&P 500 ETF before defaulting to a US-domiciled one. The good news is that none of these is a bad choice - they track the same index, and the gap between them is measured in basis points, not fortunes.
Whatever you pick, the more important habits are the ones the ticker cannot decide for you: investing consistently, keeping costs low, and holding through the market's ups and downs. Pick a solid, low-cost fund you can actually access and stick with it - that matters far more than squeezing out the last hundredth of a percent.
Legal Notice: Education, not advice. Past results do not guarantee future returns. Investing always involves risks.
Expense ratios of the four main S&P 500 ETFs
SPY is roughly three times more expensive than the cheapest options. Figures are indicative and can change - always confirm on the provider's latest prospectus.
Source: Fund provider prospectuses (Vanguard, State Street, iShares)
