How Do SPDRs, Vanguard ETFs, and iShares Differ?

iShares, Vanguard ETFs, and S&P Depositary Receipts (SPDRs) each represent different exchange-traded fund (ETF) families. In other words, an individual fund company offers a range of exchange-traded fund types under one product line or brand name. Because these ETF families are constructed and operated by different companies, there are notable differences in terms of the methodology used to construct the fund and what indexes, market segments, or sectors each ETF covers.

Key Takeaways

  • SPDRs, Vanguard ETFs, and iShares are exchange-traded fund families that offer a series of ETF types under a product line.
  • BlackRock created iShares, which includes a list of 398 different ETFs.
  • Formerly known as Vanguard Index Participation Equity Receipts, or VIPERS, the Vanguard ETFs are a group of index and sector funds.
  • S&P Depository Receipts are index funds and include actively traded SPDR 500 Trust (SPY), or "spiders."
  • One factor to consider when selecting an ETF is the expense ratio, which is the annual fee that all mutual funds and ETFs charge shareholders.

ETF Families

BlackRock is the company behind the iShares family of ETFs. The company offers a large selection of more than 398 funds, which cover a wide range of both U.S. and international sectors and indexes, as well as other asset classes, such as bonds, real estate, and commodities. Examples include the iShares 20+ Year Treasury Bond Fund (TLT), iShares MSCI Emerging Markets ETF (EEM), and iShares Russell 2000 ETF (IWM).

The Vanguard ETF family, formerly known as the Vanguard Index Participation Equity Receipts (VIPERs), is similar to iShares in that it offers a wide range of ETF types covering numerous indexes and sectors in more than 380 different funds. Vanguard S&P 500 ETF (VOO), Vanguard Total Stock Market ETF (VTI), and Vanguard FTSE Emerging Markets ETF (VWO) are among the largest in the fund family.

State Street Global Advisors' SPDRs are index funds that began with the launch of the S&P 500 Trust (SPY), which holds the stocks of the S&P 500 Index and is also known as "spiders," in 1993. Since then, the exchange-traded fund has become one of the most widely traded securities on the U.S. exchanges, and the family of ETFs has branched out to include other investment options, including the Select Sector SPDRs, which comprise the largest U.S. sector ETF suite.

Expense Ratios

The differences between SPDRs, Vanguard ETFs, and iShares are primarily based on the companies behind these ETFs and which indexes, asset classes, or sectors they cover. But if you are looking for exposure to the S&P 500, for example, which is offered by more than one ETF company, look at the more specific attributes of the fund.

One of the main factors to consider is the fund's expense ratio, which is the annual fee that all mutual funds and ETFs charge shareholders. SPY, for example, has one of the lowest expense ratios of less than 0.1%. In general, for an index fund, a good expense ratio is 0.2% or less.

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