Why iShares S&P 500 ETF (ASX:IVV) could be a really smart investment

iShares S&P 500 ETF might be a really good idea to consider.
The post Why iShares S&P 500 ETF (ASX:IVV) could be a really smart investment appeared first on The Motley Fool Australia. –

iShares S&P 500 ETF (ASX: IVV) might be a smart investment to consider for the long-term.

The S&P 500 is an index that is created by Standard and Poors. The index includes 500 leading companies and covers approximately 80% of available market capitalisation in the US.

There are quite a reasons to think about this exchange-traded fund (ETF) which is offered by Blackrock.

Here are three of those reasons to think it’s a smart potential investment:

Very low costs

Costs, or a lack of costs, can have a big impact on the long-term returns for investors. Some investment managers charge well north of 1% per annum. With plenty charging performance fees on top of that.

Compare that to iShares S&P 500 ETF, which has an annual management fee of 0.04%.

That is very, very low and allows almost all of the gross returns to be turned into net returns for investors.

High-quality holdings

The businesses in the iShares S&P 500 ETF have had to be the cream of the crop to get to the size they are. Plenty of them are still growing, not just in the US but around the world.

Companies like Microsoft, Alphabet, Apple and so on make huge amounts of profit around the globe – not just in the US. They have extremely strong competitive positions.

But there are plenty of businesses beyond the world’s biggest tech names in the S&P 500 portfolio like Tesla, Berkshire Hathaway, Nvidia, JPMorgan Chase, Johnson & Johnson, Visa, UnitedHealth, Home Depot, Proctor & Gamble, PayPal, Mastercard, Walt Disney, Adobe, Bank of America, Pfizer, Salesforce, Netflix, Nike and so on.

As a group, the S&P 500 has performed strongly over the last decade. However, past performance does not guarantee future results. The iShares S&P 500 ETF has returned an average of 19.9% per annum over the past decade.


iShares S&P 500 ETF offers plenty of diversification. Geographically, the earnings come from across the world.

But the businesses also spread across various sectors as well. But tech gets the biggest weightings, which typically comes with higher margins and more profit growth.

iShares S&P 500 ETF, at 5 August 2021, had the following allocations of more than 5%: IT (27.85%), health care (13.4%), consumer discretionary (12.06%), communication (11.22%), financials (11%), industrials (8.31%) and consumer staples (5.76%).

But some of the businesses are classified in other sectors that could also count as tech like Facebook and Alphabet classified as communication, and Amazon and Tesla classified as consumer discretionary.

The post Why iShares S&P 500 ETF (ASX:IVV) could be a really smart investment appeared first on The Motley Fool Australia.

Should you invest $1,000 in right now?

Before you consider , you’ll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and wasn’t one of them.

The online investing service he’s run for nearly a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

*Returns as of May 24th 2021

More reading

ASX investors could diversify their portfolios with these quality ETFs

Best ASX ETF? This fund would be Warren Buffett’s top pick

2 top ETFs that might be buys in August 2021

3 high quality ETFs for ASX investors

3 reasons why the iShares S&P 500 ETF (ASX:IVV) could be a great investment

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended iShares Trust – iShares Core S&P 500 ETF. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;

To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.

An active and funded account with a positive trading balance is required to continue to have access to the tools;

Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;

Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!