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iShares Core S&P 500 ETF

IVV:NYSE

equity ETF | passive | iShares | Tracks S&P Dow Jones Indices

Market Price

US$691.96 (22 Jan 2026)

+13.38% (YoY)

NAV

US$680.35

+1.71% Premium

Yield

1.17%

0.00% (YoY)

Expense Ratio

0.03%

-57% vs Avg: 0.07%

Box Set (ETF)

⚡ Executive Summary

📊 The Bottom Line

This ETF tracks the S&P 500 – the 500 largest US companies, offering broad exposure to the US large-cap equity market. With its exceptionally low expense ratio and robust liquidity, IVV is a cornerstone for long-term growth-oriented portfolios. Bull case projects NAV reaching US$790 (+16.1%) while bear case suggests US$620 (-9.6%) over 12-18 months.

⚖️ Risk vs Reward

The S&P 500, which IVV tracks, currently trades at elevated valuations, with a P/E ratio around 22.31x, slightly above its historical average. This positions it at a premium compared to broader global equity markets, which may introduce valuation risk. While the underlying holdings benefit from strong earnings growth and innovation, particularly in technology, a market correction or sustained economic slowdown could lead to multiple compression. The ETF's tight tracking and high liquidity mitigate operational risks, but investors should be mindful of the overall market's current risk-reward profile, where upside may be constrained by present valuations relative to potential downside in a contractionary scenario.

🚀 Why IVV Could Soar

• Continued robust corporate earnings growth, particularly from dominant technology and growth-oriented companies within the S&P 500, could drive index appreciation by 10-15% over the next 12-18 months.
• Potential for interest rate cuts by the Federal Reserve could expand market multiples, historically leading to 5-10% upside in equity valuations.
• Strong investor inflows into passive, broad-market ETFs like IVV continue to support price stability and consistent demand for underlying assets.

⚠️ What Could Go Wrong

• Elevated inflation or persistent high interest rates could trigger valuation compression across the S&P 500, leading to a 10-15% market correction.
• Economic recession causing a significant decline in corporate earnings could result in a 20-25% drawdown in the index, amplified by current high valuations.
• Geopolitical tensions or unexpected market-moving events could increase market volatility and investor risk aversion, leading to capital outflows from equities.

🏢 Fund Overview

What Are You Actually Buying

The S&P 500 Index represents the large-capitalization segment of the U.S. equity market, encompassing 500 leading U.S. publicly traded companies selected by S&P Dow Jones Indices based on criteria such as market size, liquidity, and sector representation.
It serves as a key benchmark for the overall health of the U.S. stock market and broader economy, with its constituents spanning all major sectors from technology to financials, healthcare, and consumer staples.
Investing in the S&P 500 provides diversified exposure to established industry leaders, typically characterized by stable earnings, significant market influence, and a mix of growth and value characteristics, making it a core holding for many long-term investors.

Market Dynamics & Outlook

The U.S. equity market, particularly large-cap segments like the S&P 500, currently reflects investor optimism driven by expectations of easing inflation and potential interest rate cuts.
A significant portion of recent S&P 500 performance has been concentrated in a handful of mega-cap technology companies, leading to debates about market breadth and sustainability.
While corporate earnings have shown resilience, future growth is subject to global economic conditions, consumer spending trends, and the ongoing impact of technological advancements such as artificial intelligence.
Regulatory scrutiny on large technology firms and geopolitical uncertainties could introduce volatility, balancing the otherwise positive sentiment around innovation and economic recovery.

🎯 Why This Matters

Understanding the S&P 500's current dynamics is crucial for investors as its concentration in a few large-cap growth stocks dictates much of its performance. While it offers broad market exposure, the current high valuations and sector-specific dependencies mean investors should weigh the benefits of diversification against potential risks from market overconcentration and economic shifts.

📈 Valuation & Analysis

Historical Performance

YTD

+1.42%

+17.85%

Yearly Growth (3Y)

+22.97%

Yearly Growth (5Y)

+14.39%

Yearly Growth (10Y)

+14.78%

Yearly Growth (Since Inception)

+8.17%

Current Valuation

As of January 21, 2026, the iShares Core S&P 500 ETF's underlying holdings have an aggregate P/E ratio of 29.74x and a P/B ratio of 5.42x, with a 12-month trailing dividend yield of 1.17%. These valuation metrics are currently above the long-term historical averages for the S&P 500, indicating that the market is trading at a premium. While this premium can be justified by strong earnings growth, particularly from its dominant technology constituents, it suggests that future returns may be more driven by sustained earnings expansion rather than multiple expansion. Investors should be aware that the market's current pricing reflects a degree of optimism.

The Bull Case - Upside to

Robust Earnings Growth from Mega-Caps

Medium Probability

If key S&P 500 constituents, particularly technology giants, continue to deliver earnings growth exceeding consensus by 5-8%, it could drive the ETF's NAV up by 10-15% over the next 12-18 months.

Sustained Economic Soft Landing Scenario

Medium Probability

A 'soft landing' or mild economic slowdown, avoiding a deep recession, would support current market multiples and could lead to a 5-10% appreciation in the S&P 500.

Capital Inflows to Passive Index Funds

Probability

Continued strong investor preference for low-cost, passive S&P 500 exposure could drive further capital inflows into IVV, providing persistent demand for its underlying stocks and contributing to a 5% NAV increase.

The Bear Case - Downside to

Persistent Inflation and Higher-for-Longer Rates

Medium Probability

If inflation remains sticky, forcing the Federal Reserve to maintain high interest rates, it could trigger valuation compression and a 10-15% market correction.

Economic Recession and Earnings Contraction

Medium Probability

A more severe economic recession leading to a significant (20-25%) decline in S&P 500 corporate earnings could result in a 15-20% drawdown in the ETF's NAV.

Concentration Risk in Top Holdings

Probability

Over-reliance on a few mega-cap technology stocks means that a significant correction in these names (e.g., a 20% drop) could disproportionately impact the overall ETF, potentially pulling the NAV down by 5-8% even if other sectors remain stable.

Risk/Reward Assessment

Looking at the S&P 500's current positioning, investors face a scenario where upside potential is supported by robust earnings from mega-cap technology firms and expectations of a 'soft landing' for the economy. The structural tailwinds of digital transformation and innovation within the index's leading companies remain strong, justifying current valuations to some extent. However, this optimism is balanced by considerable risks. Elevated valuations across the board leave the market vulnerable to interest rate shocks or a sharper-than-expected economic downturn, which could significantly compress multiples. Furthermore, the high concentration of the index in a few large technology stocks introduces a specific risk: a downturn in these bellwethers would have an amplified impact on the overall ETF performance. For long-term investors, IVV offers efficient access to the broad U.S. market, but a careful consideration of these concentrated risks against the backdrop of current valuations is prudent.

Peer Comparison

• IVV offers one of the lowest expense ratios in the category at 0.03%, matching VOO and significantly undercutting SPY's 0.09%, leading to superior long-term cost efficiency. [cite: 1, 9, 17 in previous response] • With an AUM of US$761.03 billion, IVV provides excellent liquidity, making it suitable for institutional and large-scale individual investors, though slightly less than VOO's US$839.1 billion. [cite: 1, 9 in previous response] • Historically, IVV and VOO have demonstrated remarkably similar performance and tracking to the S&P 500 index due to their identical underlying benchmarks and low-cost structure. [cite: 7 in previous response] • SPY, while highly liquid and older, carries a higher expense ratio and a Unit Investment Trust structure that can introduce minor cash drag, making IVV or VOO often preferred for long-term buy-and-hold strategies. [cite: 29 in previous response]

Fund	Expense Ratio	AUM (B)	1Y Return	3Y Return	5Y Return	Yield
iShares Core S&P 500 ETF (IVV) ⭐	0.03%	US$761.0B	17.85%	22.97%	14.39%	0.01%
Vanguard S&P 500 ETF (VOO)	0.03%	US$839.1B	17.84%	22.97%	14.38%	0.01%
SPDR S&P 500 ETF Trust (SPY)	0.09%	US$707.4B	18.28%	21.99%	13.57%	0.01%
Invesco S&P 500 Equal Weight ETF (RSP)	0.20%	US$82.1B	14.10%	N/A	N/A	0.02%

🎯 Why This Matters

The detailed valuation and peer analysis highlight IVV's strong competitive positioning as a low-cost, highly liquid vehicle for S&P 500 exposure. While its underlying market currently trades at rich valuations, its operational efficiency and tight tracking make it a compelling choice for investors seeking broad U.S. equity market access. Key decision factors include long-term cost savings, liquidity for active management, and the overall market outlook for large-cap growth stocks.

📊 Appendix

Top 10 Holdings (80+ of ETF Value)

#	Ticker	Logo	Name	Sector	Weight
1	NVDA	N	NVIDIA Corporation	Technology	7.6%
2	AAPL	A	Apple Inc.	Technology	6.2%
3	MSFT	M	Microsoft Corporation	Technology	5.6%
4	AMZN	A	Amazon.com Inc.	Consumer Cyclical	3.8%
5	GOOGL	A	Alphabet Inc. Class A	Communication Services	3.3%
6	AVGO	B	Broadcom Inc.	Technology	2.6%
7	GOOG	A	Alphabet Inc. Class C	Communication Services	2.6%
8	META	M	Meta Platforms Inc.	Communication Services	2.3%
9	TSLA	T	Tesla Inc.	Consumer Cyclical	2.1%
10	BRK.B	B	Berkshire Hathaway Inc. Class B	Financials	1.5%

Fund Mechanics

How It Works

The iShares Core S&P 500 ETF (IVV) is a passively managed exchange-traded fund designed to track the performance of the S&P 500 Index. The S&P 500, created by S&P Dow Jones Indices, includes 500 of the largest publicly traded U.S. companies, selected based on criteria such as market size, liquidity, and sector representation to ensure it is a leading indicator of the U.S. equity market. IVV employs a full replication strategy, meaning it aims to hold all the securities in the S&P 500 Index in approximately the same proportions as the index itself, minimizing tracking error. The index is rebalanced quarterly and reconstituted periodically to reflect changes in market capitalization and maintain representativeness of the broad U.S. large-cap market.

Holdings Breakdown

Number of Holdings

503

Top 10 Concentration

3754.0%

Turnover Rate

300%

Category	Weight	Description
Technology	34.4%
Financial Services	12.8%
Communication Services	10.8%
Consumer Cyclical	10.7%
Healthcare	9.6%
Industrials	7.9%
Consumer Defensive	4.9%
Energy	3.0%
Utilities	2.3%
Real Estate	1.9%
Basic Materials	1.8%

Cost Efficiency

Expense Ratio

0.03%

Median Bid-Ask Spread

0.010%

Expense Ratio History

Year	Expense Ratio
2025	0.03%
2024	0.03%
2023	0.03%

Performance History

Year	ETF Return	Benchmark Return	Tracking Diff	Volatility	Max Drawdown	Sharpe Ratio
2025	17.85%	17.88%	-0.03%	19.19%	-22.60%	0.12
2024	24.98%	25.02%	-0.04%	15.87%	-22.60%	1.16
2023	26.27%	26.29%	-0.02%	17.64%	-22.60%	0.83
2022	-18.13%	-18.11%	-0.02%	N/A	N/A	N/A
2021	28.66%	28.71%	-0.05%	N/A	N/A	N/A

Annualized Return Since Inception

8.17%

Detailed Peer Comparison

Ticker	Name	Issuer	Exp Ratio	AUM (B)	1Y	3Y	5Y	Yield	StdDev 3Y	Sharpe 3Y	Spread
IVV ⭐	iShares Core S&P 500 ETF	iShares	0.03%	US$761.0B	17.9%	23.0%	14.4%	0.01%	0.12%	1.16	0.010%
VOO	Vanguard S&P 500 ETF	Vanguard	0.03%	US$839.1B	17.8%	23.0%	14.4%	0.01%	N/A	N/A	N/A
SPY	SPDR S&P 500 ETF Trust	State Street Investment Management	0.09%	US$707.4B	18.3%	22.0%	13.6%	0.01%	N/A	N/A	N/A
RSP	Invesco S&P 500 Equal Weight ETF	Invesco	0.20%	US$82.1B	14.1%	N/A	N/A	0.02%	N/A	N/A	N/A
Category Average			0.07%	—	17.0%	22.4%	13.8%	0.01%	—	N/A	—

Risk Metrics

Beta

1.00

Standard Deviation

1 Year	3 Years	5 Years	10 Years
19.19%	15.87%	17.64%	N/A

Sharpe Ratio

1Y	3Y	5Y	10Y
0.12	1.16	0.83	N/A

Sortino Ratio

3 Years	5 Years
N/A	N/A

Maximum Drawdown

1 Year	3 Years	5 Years	Since Inception
-22.60%	-22.60%	-22.60%	-33.71%

Correlations

S&P 500

1.00

Liquidity & Trading

Volume

Avg Daily Shares

6,864,642

Avg Daily Dollar Volume

US$4749.5M

Trend

stable

Bid-Ask Spread

Metric	Value
Median (Percent)	0.010%
Median (Dollar)	US$0.07
During Hours	N/A
At Close	N/A
Volatility	low

Premium/Discount to NAV

Metric	Value
Current	-0.01%
30-Day Average	N/A
1-Year Average	N/A
Standard Deviation	N/A
Max Premium (1Y)	N/A
Max Discount (1Y)	N/A

Creation/Redemption Activity

Trend

Not available

Net Flows

Period	Net Flow

⚠️ Disclaimer: This ETF research report is for informational and educational purposes only. It does not constitute investment advice, a recommendation, or an offer to buy or sell securities. EC² Invest is not a registered investment advisor. All data is sourced from public sources and may contain errors. Past performance does not guarantee future results. ETF investing involves risk, including possible loss of principal. Always conduct your own research and consult with a qualified financial professional before making investment decisions.