SPY was the first US-listed ETF, launched in 1993, and is one of the most actively traded securities on US exchanges. It tracks the S&P 500, the same index as IVV and VOO, but charges a higher expense ratio. SPY is structured as a unit investment trust, so it cannot reinvest dividends immediately and holds them in cash until the quarterly distribution, which creates a small drag compared with open-end funds. SPY has very high trading volume and the most active options market among ETFs, which is why institutions and traders use it for large trades and hedging. For long-term buy-and-hold investors, IVV, VOO or SPLG offer the same index at a lower cost.
