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Why iShares S&P 500 ETF (ASX:IVV) is such a good investment

iShares S&P 500 ETF (ASX:IVV) is a really good investment in my opinion, it's one of the leading exchange-traded funds (ETFs).
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Jaz Harrison

Jaz is a Staff Writer for Rask. She is a keen investor who loves to thoroughly poke holes in an investment idea before it has a chance of making it into her portfolio. Jaz invests for the long-term and doesn't sweat the small stuff. She strongly believes that empowering people with knowledge is the best way for them to take charge of their finances, which is exactly the approach she takes with her own money and investments.
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iShares S&P 500 ETF (ASX: IVV) is a really good investment in my opinion, it’s one of the leading exchange-traded funds (ETFs).

What is iShares S&P 500 ETF?

It’s an ETF that’s based on 500 of the biggest and most profitable listed businesses in the US.

That means it owns many of the large and established companies in America.

You may recognise some of largest businesses in the portfolio like Apple, Microsoft, Amazon, Facebook, Alphabet (Google), Berkshire Hathaway, Tesla, Nvidia, JP Morgan Chase, Johnson & Johnson, Visa, PayPal, Home Depot, Mastercard, Procter & Gamble, Walt Disney and Adobe.

But there are a number of reasons why I think it’s a really good investment to own:

Diversification

The businesses in this portfolio are spread across many different sectors including IT (27.7%), healthcare (12.99%), consumer discretionary (12.26%), communication (11.13%), financials (11.05%), industrials (8.42%), consumer staples (5.84%) and so on.

There’s good diversification with the sectors in the iShares S&P 500 ETF portfolio, and those sectors have 500 businesses between them.

Whilst all of these businesses are listed in the US, many of them make profit from all over the world. Visa and Mastercard are in almost every country in the world.

Fees

Low fees are really good because it means that investors get to keep almost all of the returns in their portfolio rather than losing it. iShares S&P 500 ETF has an annual management of just 0.04%. That’s nice for investors considering Blackrock is a profit-making enterprise.

High-quality holdings

The companies in the IVV ETF portfolio are very high quality. They have very strong market positions.

Imagine being given $10 billion to try to dislodge Apple from their smartphone position or Google from the Search position. I don’t think it would be possible.

Those are the types of investments that I’d want to own in my portfolio. I would be happy to own Apple or Microsoft (and so on) in my portfolio individually. But it’s very easy owning them all in one investment.

Summary thoughts

iShares S&P 500 ETF is a really good investment in my opinion. It ticks many of the boxes you could want. The only thing is that it doesn’t have much of a dividend yield, but that relates to the growth-focus of most of the large positions in the portfolio.

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Information warning: The information on this website is published by The Rask Group Pty Ltd (ABN: 36 622 810 995) is limited to factual information or (at most) general financial advice only. That means, the information and advice does not take into account your objectives, financial situation or needs. It is not specific to you, your needs, goals or objectives. Because of that, you should consider if the advice is appropriate to you and your needs, before acting on the information. If you don’t know what your needs are, you should consult a trusted and licensed financial adviser who can provide you with personal financial product advice. In addition, you should obtain and read the product disclosure statement (PDS) before making a decision to acquire a financial product. Please read our Terms and Conditions and Financial Services Guide before using this website. The Rask Group Pty Ltd is a Corporate Authorised Representative (#1280930) of AFSL #383169.

At the time of publishing, Jaz does not have a financial or commercial interest in any of the companies mentioned.

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