iShares vs SPDR: ETF Provider Comparison
iShares offers the widest, often-cheapest lineup; SPDR runs SPY and GLD, two of the most-traded funds ever. Here's how the two ETF pioneers actually differ.
Don't have time? Here's what you need to know:
- 1iShares (BlackRock) leads on lineup breadth and often on core-fund cost; its Core series competes directly with SPDR's Portfolio line.
- 2SPDR (State Street) runs SPY and GLD, two of the most-traded ETFs ever, giving it an unmatched liquidity edge for traders.
- 3Within SPDR, SPLG offers the same S&P 500 exposure as SPY at roughly a quarter of the fee.
- 4Mix the two brands freely and choose each fund by its expense ratio and index, not by issuer loyalty.
Two Pioneers of the ETF Industry
SPDR, run by State Street, launched the first U.S.-listed ETF in 1993 with SPY, the fund that still anchors the entire industry. iShares, now owned by BlackRock, came later but grew into the largest ETF brand in the world by assets, with the broadest lineup spanning nearly every asset class, country, and factor.
So this is not a contest between a giant and an upstart; both are dominant. The practical question is where each one leads. iShares wins on breadth and, increasingly, on cost for core holdings. SPDR wins on a handful of flagship funds with unmatched trading liquidity, plus its low-cost 'Portfolio' line that competes head-on with the cheapest funds available.
Cost: iShares Core vs SPDR Portfolio
Both brands run a low-cost core series aimed at buy-and-hold investors. iShares Core includes IVV (S&P 500 at ~0.03%), ITOT (total U.S. market), IEFA (developed international), and AGG (U.S. aggregate bonds). SPDR's Portfolio line answers with SPLG (S&P 500 at ~0.02%), SPTM (total market), SPDW (developed international), and SPAB (aggregate bonds).
On the S&P 500 specifically, SPDR's SPLG has at times been a hair cheaper than iShares' IVV, both far below the original SPY's 0.0945%. The lesson is that the famous flagship is not the cheap option within its own family: an investor who wants State Street's S&P 500 exposure at minimum cost should look at SPLG, not SPY. Across the rest of the lineup, iShares and SPDR core funds are typically within a basis point or two of each other.
| Exposure | iShares Core | ER | SPDR Portfolio | ER |
|---|---|---|---|---|
| S&P 500 | IVV | ~0.03% | SPLG | ~0.02% |
| Total U.S. market | ITOT | ~0.03% | SPTM | ~0.03% |
| Developed international | IEFA | ~0.07% | SPDW | ~0.03% |
| U.S. aggregate bonds | AGG | ~0.03% | SPAB | ~0.03% |
| Flagship (legacy) | — | — | SPY | ~0.0945% |
Tip: Within State Street's own lineup, SPLG gives you the same S&P 500 exposure as SPY at roughly a quarter of the fee. SPY's premium pays for trading liquidity most investors never use.
Liquidity: SPDR's Flagship Advantage
SPDR owns two of the most heavily traded ETFs in existence: SPY, the deepest equity ETF with the largest options market in the world, and GLD, the original physical-gold ETF. For active traders, options writers, and institutions moving large blocks, that liquidity is a genuine, measurable edge that the bid-ask spread reflects in fractions of a penny.
iShares is hardly illiquid, its core funds trade tightly too, but it does not have a single fund with SPY's sheer depth. If your use case is high-frequency trading or large options positions, SPDR's flagships are purpose-built for it. If you are dollar-cost averaging a few hundred dollars at a time, that depth is invisible and you should optimize for cost instead, which points back toward the cheaper core funds from either brand.
Breadth: Sectors, Factors, and Niches
iShares offers the widest menu in the industry: single-country funds, factor strategies (USMV, QUAL, MTUM), bond funds sliced by maturity and credit, and broad international coverage. If you want a specific, narrow exposure, iShares very often has a fund for it. SPDR's most famous specialist tools are its Select Sector SPDRs, the XL-series, which split the S&P 500 into eleven sector funds like XLK (technology), XLE (energy), and XLF (financials).
Those Select Sector SPDRs are the default sector tools for many traders because of their liquidity and tight spreads. So even though iShares leads on overall breadth, SPDR dominates the specific niche of liquid U.S. sector trading. Match the brand to the job: iShares for granular long-term building blocks, SPDR sectors when you want a heavily traded sector vehicle.
Which Brand Should You Use?
For a low-cost core portfolio, either family works, and you can mix them freely; an investor might hold IVV for the S&P 500, SPDW for cheap international, and AGG for bonds without any conflict. Choose by the specific fund's cost and the index it tracks, not by loyalty to a logo.
Reach for SPDR when you specifically want SPY's options liquidity, GLD's gold exposure, or a liquid Select Sector fund. Reach for iShares when you want the broadest menu of cheap core and factor funds in one place. Both are blue-chip issuers, and at the core-portfolio level the gap between them is small enough that the index and the expense ratio should decide.
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Frequently Asked Questions
Is iShares or SPDR cheaper?
It depends on the fund. For the S&P 500, SPDR's SPLG (~0.02%) has at times edged out iShares' IVV (~0.03%), while the legacy SPY costs far more at ~0.0945%. Across the rest of their core lineups, iShares and SPDR are usually within a basis point or two. Compare the specific fund rather than the brand.
Why is SPY so much more expensive than SPLG if both are SPDR funds?
SPY launched in 1993 as the first U.S. ETF and is structured as a unit investment trust; State Street keeps its 0.0945% fee because its unmatched liquidity keeps traders and institutions loyal. SPLG is a newer Portfolio-line fund built for cost-conscious long-term investors at roughly 0.02%, tracking the same S&P 500.
Which brand is better for sector investing?
SPDR's Select Sector funds (the XL-series like XLK, XLE, and XLF) are the most heavily traded U.S. sector ETFs, with tight spreads that traders favor. iShares offers sector funds too, but for liquid U.S. sector exposure the Select Sector SPDRs are the default tool for many investors.
Can I mix iShares and SPDR funds in one portfolio?
Yes, freely. There is no downside to holding, say, IVV for the S&P 500, SPDW for international, and a SPDR sector fund alongside one another. Choose each holding on its cost and the index it tracks; the issuing brand does not need to be consistent across your portfolio.
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Alex Harrington
CFA Level II Candidate, Finance & Economics
Alex Harrington is an independent ETF researcher and personal finance writer with over 8 years of experience analyzing exchange-traded funds. A CFA Level II candidate with a background in economics, Alex has reviewed 800+ ETFs and helped thousands of beginners build their first investment portfolios through clear, jargon-free education.
This content is for educational purposes only and does not constitute financial advice. Past performance does not guarantee future results. Consult a licensed financial advisor before making investment decisions.