IVV Is a Great Choice for Most, but I Like SPLG ETF Better

It can be fun to do all the re, pick some great stocks, and then watch the outsized returns that all your hard work duced roll in

But some investors don't necessarily find "hard work" to be fun

For those investors, one of the best ways to get richer is to choose a quality, low-cost index fund to do the hard work for them

Even Warren Buffett, the legendary CEO of Berkshire Hathaway and one of the best stock pickers on the planet, famously endorses index funds as a great option for the average investor

In his 2013 letter to holders, Buffett wrote that his will specifies how his money should be invested after his death: "My advice to the trustee could not be more simple: Put 10% of the cash in short-term government bonds and 90% in a very low-cost S&P 500 index fund

I believe the trust's long-term results from this policy will be superior to those attained by most investors -- whether pension funds, institutions or individuals -- who employ high-fee managers. " Buffett believes that fessional fund managers should try to beat the S&P 500, but individual investors should look at these low-cost exchange-traded funds (ETFs) as the best way to grow their wealth

And it's a really good fund

If I had to choose one index fund, SPLG is at the top of my list

Image source: Getty Images

SPLG is a market-cap-weighted fund, which means that companies with the largest market capitalization have a higher weighting

Top 10 Holdings SPLG Portfolio Weight IVV Portfolio Weight 1

Berkshire Hathaway (Class B) 1

IVV is also a market-cap-weighted fund, so as you can see on the chart, its holdings are nearly identical because it's built the same way

The only real difference in the top 10 is that Tesla comes in at No. 9 with the SPLG, and at No. 8 with the IVV

That's bably just a matter of one fund balancing a little quicker than the other, but the difference is negligible and doesn't factor into my final conclusion

It's all the expenses My choice comes down to which ETF is cheaper to buy, hold, and sell

That's a good price and what you would expect from any quality index fund

But the SPLG is just a little bit better

And here's one more factor that's in SPLG's favor: the bid-ask spread, which is essentially the difference between what buyers want to pay and what sellers want to receive

You can't get more efficient than a perfect match

When the asking price is higher than the bid price, you lose a little bit of money every time you buy

That's not a big deal if you are a set-it-and-forget-it investor, but if you're a day trader or a fund manager, those pennies add up quickly

So, I prefer the more efficient ETF, the SPLG

The bottom line To be honest, you can't go wrong with either of these ETFs

I'm not suggesting that anyone sell their s of IVV

But for me, the SPLG is a hair better and wins this comparison

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors

Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors

Patrick Sanders has positions in Nvidia

The Motley Fool has positions in and recommends Alphabet, Apple, Berkshire Hathaway, Meta Platforms, Microsoft, Nvidia, and Tesla

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