SPY vs IVV: ETF comparison

What happened: In the first half of 2026, the VanEck Semiconductor ETF (SMH) against the iShares Semiconductor ETF (SOXX) was the most compared ETF pair on ETF.com's comparison tool, with 6,743 views. This surge in interest was driven by the ongoing AI infrastructure buildout, fueling explosive demand for chips. Meanwhile, SOXX outperformed the iShares Technology Select Sector SPDR Fund (IYW) in terms of total returns over the last year but exhibited higher volatility and a deeper historical drawdown. In the S&P 500 ETF space, iShares Core S&P 500 ETF (IVV) slightly outperformed State Street SPDR S&P 500 ETF Trust (SPY) and offered a higher trailing-12-month dividend yield, despite having a slightly higher expense ratio.

Market impact: The semiconductor sector has seen increased investor attention due to the AI boom, benefiting ETFs like SMH and SOXX. The concentration of holdings in SOXX has driven its higher returns but also increased its risk profile. In the broader market, IVV's strong earnings growth, driven by a few large-cap stocks, has made it an attractive option for investors seeking broad-based exposure to the S&P 500.

What to watch next: Investors should monitor the earnings reports of major semiconductor companies, such as those held by SMH and SOXX, to gauge the sustainability of the AI-driven demand. Additionally, the performance of IVV's top holdings and their impact on the fund's overall returns will be crucial to watch, as the fund's growth has been largely driven by a handful of businesses. Lastly, keep an eye on the expense ratios and performance of SPY and IVV to determine if the slight outperformance and higher dividend yield of IVV continue to justify its higher expense ratio.