IShares Core S&P 500 IVV closely reflects the composition of the US stock market and charges one of the lowest fees in its Morningstar Category.
The fund tracks the flagship S&P 500, which selects 500 of the largest US stocks that pass its profitability and trading requirements—roughly 80% of the US equity market. It weights them by market capitalization, which harnesses the market’s collective wisdom on each stock’s relative value. An index committee has the final say on index additions and removals. While a committee-based approach may lack clarity, it adds flexibility to reduce unnecessary changes during reconstitution, taming transaction costs.
Highly traded markets like US large caps reflect information quickly and work well for indexing. That’s why large-blend index funds have outperformed their actively managed peers on average over the long run. Market-cap-weighting also generates lower trading costs than most actively managed funds.
The fund diversifies its portfolio more than its average large-blend category peer. It typically holds 3 times as many stocks, and the top 10 represented 36% of portfolio assets compared with its average peer’s 53% as of January 2025. Still, the fund’s holdings can become concentrated. The portion of the fund in the top 10 holdings has steadily increased in recent years; it has doubled since 2015.
The fund accurately tracks the contours of its average peer in the large-blend category. Its value-growth and market-cap orientations align closely with its average category peer, albeit with a minor value tilt produced from the profitability screen. Although the fund doesn’t hold small-cap stocks, its average peer doesn’t either. The fund’s sector allocations closely reflect the opportunity set as well, with no sector deviating by more than 2 percentage points from the category average as of January 2025. Aligning with the pack turns this fund’s low 0.03% fee into a performance edge.
The fund outperformed its peers by 2.23 percentage points over the 10 years through January 2025. The fund should perform better than its average peer during market rallies, capitalizing on its minuscule cash position. Although the fund ticked down from its all-time highs alongside its peers in 2020 and 2022, it recovered quickly and came out ahead. Broad diversification and low fees make it a solid option for exposure to US stocks.
iShares Core S&P 500 ETF: Performance Highlights
This strategy closely follows the performance of the US stock market, which allows it to compound its durable low-cost advantage.
The fund outperformed its average large-blend peer by 2.23 percentage points annualized over the 10 years through January 2025. During that period, the fund’s returns fluctuated a hair more than the large-blend category average, but its risk-adjusted performance remained easily ahead.
The fund has typically outperformed its average peer in up markets while capturing roughly the same downside. This fund fell 18%—a percentage point worse than its average peer—in 2022, the worst year in recent history for US stocks. When the market pulled out of its nosedive, this fund shone by beating its average peer by 4.0 and 3.5 percentage points in 2023 and 2024, respectively.
The author or authors do not own shares in any securities mentioned in this article. Find out about Morningstar’s editorial policies.
