SPDR S&P 500 ETF’s 0.09% Fee Triples Vanguard’s 0.03% Expense Ratio
SPDR S&P 500 ETF Trust (SPY) charges a 0.09% expense ratio, triple the 0.03% fee of Vanguard S&P 500 ETF, making it the oldest but costlier S&P 500 ETF option. Its higher expenses may erode returns compared with lower-cost alternatives like VOO and RSP over long-term holds.
1. Expense Ratio and Liquidity Profile
SPDR S&P 500 ETF Trust (SPY) remains one of the most liquid large-cap equity ETFs, trading an average of nearly 6 million shares per day. Its expense ratio of 0.09% positions it between the ultra-low-cost Vanguard S&P 500 ETF (0.03%) and other legacy products. Despite being the oldest ETF, SPY continues to attract significant inflows, reflecting investor preference for its deep order book and minimal tracking error versus the S&P 500 index.
2. Investor Behavior During 2025 Tariff Volatility
When U.S. tariff headlines triggered a brief $5 trillion market value swing in April 2025, many long-term investors paused contributions to SPY. Data show SPY’s intraday trading range widened by over 1% on key tariff news days, yet the fund recovered swiftly once a 90-day tariff pause was announced. This episode underscored the risk of market-timing, as those who halted purchases missed out on the subsequent rebound that propelled SPY to new all-time highs by year-end.