SPY ETF Review, The SPDR S&P 500 ETF Trust (SPY) has long been one of the most recognized and widely traded exchange-traded funds (ETFs) offering exposure to the U.S. large-cap equity market. But with the ETF industry expanding rapidly and strong alternatives such as Vanguard’s VOO and BlackRock’s IVV, many investors now wonder: Is SPY still the best choice, or is it time to consider its competitors?
This analysis highlights SPY’s strengths, compares it to its top rivals, and explains how SPY futures and SPY stock price trends continue to influence portfolio decisions in 2025.
Understanding the Basics: What Is SPY?
SPY tracks the S&P 500 index, which consists of 500 of the largest publicly traded U.S. companies. It provides broad market exposure, instant diversification, and high liquidity in a single security.
Launched in 1993 by State Street Global Advisors, SPY was the first ETF in the United States and has since developed a massive ecosystem of options, futures, and derivative products.
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SPY stock price moves in line with the overall U.S. equity market.
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SPY futures enable nearly 24-hour market access and are highly useful for hedging and speculation.
SPY vs. Its Closest Competitors
1. Expense Ratios and Costs
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SPY expense ratio: ~0.0945%
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VOO & IVV expense ratios: as low as 0.03%
This makes VOO and IVV much more attractive for long-term investors focused on minimizing costs. Over decades, even small fee differences can translate into thousands of dollars in savings.
2. Liquidity and Trading Volume
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SPY dominates the market with exceptional liquidity, often trading more than 70 million shares per day.
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This results in tight bid-ask spreads, helping reduce trading costs.
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VOO and IVV have lower trading volumes, though their liquidity is still sufficient for most individual investors.
For high-frequency traders and institutions, SPY’s liquidity remains unmatched.
3. Derivatives Ecosystem and Flexibility
SPY is the clear winner in derivative markets:
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SPY has the largest and most liquid options market among ETFs.
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SPY futures traded on the CME offer extended trading hours, ideal for global market positioning and risk management.
This extensive derivatives ecosystem gives SPY a strong edge for active traders, hedgers, and institutional investors.
4. Dividend Payment and Tracking Accuracy
All three ETFs—SPY, VOO, and IVV—distribute dividends from the S&P 500 companies they hold.
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SPY may show slightly higher tracking error due to its structure, but the difference is minimal and typically irrelevant for most investors.
Why SPY Still Matters in a Modern Portfolio
SPY ETF Review, Even with higher fees, SPY remains valuable for several reasons:
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Unparalleled liquidity
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Deep derivative markets
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Reliable price tracking
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Flexibility for tactical trading
Investors who prioritize cost efficiency may choose VOO or IVV, but for traders using options, futures, or high-volume strategies, SPY’s ecosystem is irreplaceable.
What Influences SPY Stock Price and Futures?
SPY’s price is driven by a combination of:
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Corporate earnings trends
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Federal Reserve policy
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Inflation data
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Geopolitical events
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Market sentiment
Meanwhile, SPY futures often react faster to global news because they trade nearly 24 hours, making them a leading indicator for next-day market direction.
Read More: Why the AMD Stock Price Is Rising Faster Than Expected
Conclusion: Should You Hold SPY?
Your decision depends on your investment style:
SPY is ideal for:
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Active traders
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Options and futures users
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Institutions needing deep liquidity
VOO or IVV are ideal for:
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Long-term investors
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Cost-sensitive portfolios
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Passive buy-and-hold strategies
Understanding the dynamics of SPY’s stock price, futures trading, and competitive landscape can help you choose the best ETF for your portfolio strategy in 2025 and beyond.
