The iShares S&P 500 ETF (ASX: IVV) is one of the largest exchange-traded funds (ETFs) on the ASX.
This investment is provided by Blackrock. It gives investors a number of useful benefits, which could make it worthwhile considering.
Very low fees
The IVV ETF has one of the lowest management fees of any investment product on the ASX.
Its annual management fee is just 0.04%, which is almost nothing. Plenty of active investment managers charge a fee of 1%, or even higher.
Every year, a management fee reduces an investment balance. So, the lower the better. It keeps more of the investment money in the investor’s hands, which is better for long-term net returns.
Diversification
As the name of this ETF may suggest, it has a total of 500 holdings.
That means it has 300 more holdings than the S&P/ASX 200 Index (ASX: XJO), offering plenty of diversification.
But it’s not just the number of shares that helps the investment, but the shares it holds are also worth knowing about.
Whilst resources and financials are the biggest sectors on the ASX, in the S&P 500 it is the following four industries that have double-digit exposures: IT (27.76%), healthcare (13.55%), consumer discretionary (11.61%) and financials (11.39%).
The technology businesses get the biggest allocation in the S&P 500 ETF portfolio. They are some of the biggest companies in the world.
This ETF gives ASX investors sizeable exposure to these businesses: Apple (6.99%), Microsoft (5.99%), Amazon (3.48%), Alphabet (4.2%), Tesla (1.84%), Berkshire Hathaway (1.62%), Nvidia (1.6%) and Meta Platforms (1.3%).
Of course, there are dozens of other names in there that you may have heard of such as Johnson & Johnson, Procter & Gamble, Visa, Home Depot, Mastercard, Pfizer, Walt Disney, Coca Cola, Costco, Adobe, Salesforce, Walmart and McDonalds.
There are plenty of national, or global, leaders in the portfolio.
Returns
Past performance is not a reliable indicator of future results.
However, the IVV ETF has done well for investors as many of the leading businesses grow profits and introduced new products to increase the long-term growth potential further.
Over the past five years the iShares S&P 500 ETF has delivered an average return per annum of 16.2%, showing the strength of the underlying businesses.
But who knows what the next few years are going to look like? But for the long-term, this ETF has pleasing attributes and investments.
The post 3 strengths of the iShares S&P 500 ETF (ASX:IVV) appeared first on The Motley Fool Australia.
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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.
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