Does Vanguard or State Street Have the Better S&P 500 ETF?
2026-08-26 12:27
•Brendan Coffey •The Motley Fool
• ••••• Axe Cap view
VOO vs SPY: Picking the Right S&P 500 ETF for South Africans
For local investors eyeing US markets, Vanguard’s VOO edges out State Street’s SPY on cost and long-term value.
Investors in South Africa looking to get exposure to the US S&P 500 often face a straightforward yet important choice: Vanguard's VOO or State Street's SPY. Both ETFs track the same index and hold the identical basket of large-cap US stocks. However, VOO’s much lower expense ratio of 0.03% versus SPY's 0.09% translates into meaningful savings over time. For a rand-based investor, this difference compounds and can tilt returns, especially as the USD/ZAR can be volatile. SPY’s longer track record and superior liquidity matter mostly to ultra-large institutions or traders, not everyday investors. Given the similarity in performance, VOO is the more cost-effective way to play US equities while also indirectly benefiting from the rand's swings. That said, if you highly prioritize minute liquidity differences or trading ease, SPY remains viable. But for long-term buy-and-hold South African investors, VOO is the cleaner pick. this is just our opinion and not financial advice
We recommend buying VOO over SPY for rand investors seeking US exposure due to its lower costs and similar performance. Avoid SPY unless liquidity needs trump fees.
- VOO
- SPY
- USD/ZAR
- USD/ZAR exchange rate volatility
- Potential US market disruptions affecting S&P 500 returns
6/10
Vanguard's S&P 500 ETF (VOO) and State Street's SPDR S&P 500 ETF (SPY) are compared as two major S&P 500 tracking funds. While both offer nearly identical holdings and performance, VOO's significantly lower 0.03% expense ratio versus SPY's 0.09% makes it the better choice for long-term investors, potentially saving thousands over decades despite SPY's longer track record and slightly higher liquidity.
Our take is based on reporting first published by The Motley Fool.