VOO vs SPLG: Budget S&P 500 ETF
Same index, same near-zero fee. SPLG's edge is a lower share price that makes whole-share buying easier on a small budget; VOO's is scale and brand. Here's how to choose.
Don't have time? Here's what you need to know:
- 1VOO and SPLG track the same S&P 500; expense ratios are 0.03% and 0.02% — a trivial gap.
- 2SPLG's main edge is a much lower share price, helpful for small whole-share purchases.
- 3Fractional shares at most brokers erase SPLG's price advantage, making the choice nearly a tie.
- 4Don't sell an appreciated S&P 500 fund in a taxable account to switch — the tax bill outweighs the savings.
Same Index, Essentially the Same Cost
VOO (Vanguard) and SPLG (SPDR Portfolio S&P 500) both track the S&P 500. They own the same roughly 500 large U.S. companies in the same proportions, so their pre-fee returns are nearly identical and will stay that way. This is not a contest of strategy — it is a contest of cost and convenience.
On cost they are effectively tied. SPLG charges 0.02% and VOO charges 0.03%, a one-basis-point gap that amounts to about $1 a year per $10,000 invested. Both are among the cheapest S&P 500 funds in existence, and that penny-on-the-dollar difference will never be the thing that makes or breaks your returns.
Liquidity, Scale and Why VOO Is the Default
VOO is one of the largest ETFs in the world, with enormous trading volume and razor-thin bid-ask spreads. SPLG is smaller but still highly liquid, with tight spreads and ample daily volume for any ordinary investor. Neither will leave you struggling to buy or sell at a fair price.
Because VOO is so widely held and recognized, it tends to be the default 'one fund' people reach for, and there is nothing wrong with that. SPLG is the better-kept secret: same exposure, a hair cheaper, and friendlier to small whole-share orders. The decision is genuinely close enough that personal preference and your broker's features can settle it.
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Taxes and the Switching Trap
Both funds are highly tax-efficient, using the standard ETF in-kind creation/redemption process to minimize capital-gains distributions. There is no meaningful tax advantage of one over the other.
If you already own one in a taxable account with gains, do not sell it just to capture a one-basis-point fee difference — the capital-gains tax would dwarf decades of savings. Inside an IRA or 401(k), switching is tax-free, but with the funds this close there is rarely a compelling reason to bother. The practical move is to pick one for new contributions and move on.
Important: Selling an appreciated S&P 500 fund in a taxable account to save 0.01% is a losing trade — the tax bill far outweighs the fee gap.
Frequently Asked Questions
Is VOO or SPLG better?
They track the same S&P 500 at nearly the same cost (0.03% for VOO, 0.02% for SPLG), so neither is clearly better. SPLG's lower share price helps small investors buying whole shares; VOO's massive scale and brand make it the popular default. If your broker offers fractional shares, the choice is essentially a coin flip.
Why is SPLG's share price so much lower than VOO's?
State Street deliberately keeps SPLG priced low, in the tens of dollars, to make it accessible for small purchases. VOO's share price runs into the hundreds. Both represent identical S&P 500 exposure — SPLG just divides ownership into smaller, cheaper shares, which only matters if you can't buy fractional shares.
Does the 0.01% fee difference actually matter?
Barely. One basis point is about $1 per year per $10,000 invested. Over decades it is a rounding error compared with how much you contribute and how the market performs. Don't let it drive the decision, and never sell an appreciated position in a taxable account to chase it.
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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.