Video Discription |
SPLG vs SPY - What Is The Best S&P 500 ETF To Buy? (Understand These ETFs Differences!). In this comparison video I will talk about SPLG vs SPY.
So, the main difference between them is the database categories
SPLG falls under the Large Cap Blend Equities category. This category includes ETFs that track a sector, category, or index like the S&P 500. It may also focus on equity sizes like large-cap stocks. Funds in this category prioritize diversification by investing in growth and value stocks.
Conversely, SPY falls under the Large Cap Growth Equities ETF category. This category focuses on growth company stocks with a market capitalization of at least $10 billion. This category prioritizes returns that ideally outperform the market.
Therefore, SPY promises better returns, while SPLG promises diversification.
Structure.
SPY has a Unit Investment Trust structure (UIT). UITs pool funds from different investors to buy specific portfolios. They're usually managed by fund managers who choose and monitor the performance of the underlying assets. UITs replicate the underlying index, and its investors are beneficiaries under the trust. However, they are less flexible, making them ideal for investors prioritizing diversification.
In contrast, SPLG has an ETF structure. It tracks an index but trades like the stock exchange. It offers more flexibility and allows you to reinvest your dividends immediately for more returns. However, it's subject to tracking errors.
Therefore, SPLG's ETF structure makes it ideal for hands-on investors, while SPLG's makes it perfect for hands-off investors.
Expense ratios.
SPY charges a 0.09% expense ratio, while SPLG charges 0.03%. The expense ratio is a percentage of your returns deducted to cover the fund's operating costs. A higher expense ratio results in lower returns and vice versa.
Therefore, SPLG’s lower expense ratio makes it ideal for budget-conscious investors.
But do they have any similarities?
Yes. Both ETFs are offered by State Street. As ETFs, they can be traded throughout the day and have decent tax efficiency. Additionally, the funds have similar performance and yield.
To sum up, which is better- SPLG or SPY?
I like the SPLG's ETF structure and Blend Equities investment style, which offer greater diversification that helps weather economic storms. Conversely, the SPY's Growth Equity investment style promises higher returns, which matches my investment goals. In my opinion, both are excellent choices that are worth considering.
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