iShares S&P 500 ETF (IVV) Remains a Long-Term Buy Amid Falling Interest Rates and Strong Business Performance

The iShares S&P 500 ETF (IVV) has delivered a 15.3% average net return per year over the past decade, making it one of the highest-performing ETFs. Despite a strong run, the fund remains a solid long-term buy due to falling interest rates, which can boost share prices, and the presence of excellent businesses with growth potential in areas like AI, cloud computing, and online advertising.

The iShares S&P 500 ETF (ASX: IVV) has delivered a remarkable average annual net return of 15.3% over the past decade, making it one of the highest-performing ETFs 3 reasons why the iShares S&P 500 ETF (IVV) is still a long-term buy^[1]. Despite this strong run, the fund remains a solid long-term buy due to several factors.

Firstly, recent interest rate cuts by the US Federal Reserve have created a favorable environment for share prices. Lower interest rates can boost asset prices by making borrowing cheaper and increasing demand for stocks. The Federal Reserve's recent 25 basis point cut in the Federal Funds Rate, coupled with expectations for further rate cuts in the near future, could continue to support share prices 3 reasons why the iShares S&P 500 ETF (IVV) is still a long-term buy^[1].

Secondly, the IVV ETF includes a portfolio of top-performing businesses such as Nvidia, Microsoft, and Apple. These companies are leaders in areas with significant growth potential, such as AI, cloud computing, and online advertising. For instance, Oracle is currently in talks with Meta Platforms for a multi-year cloud computing deal worth approximately $20 billion, highlighting the growing demand for computing power in these sectors Oracle eyes $20 billion AI cloud computing deal with Meta, source says^[2].

Lastly, the IVV ETF has very low management fees, which can significantly enhance long-term investment growth. With an annual management fee of just 0.04%, the fund ensures that a larger portion of the returns stays in the hands of investors, allowing for stronger compounding of wealth over the long term 3 reasons why the iShares S&P 500 ETF (IVV) is still a long-term buy^[1].

While past performance is not a guarantee of future returns, the combination of falling interest rates, the presence of excellent businesses with growth potential, and very low management fees makes the iShares S&P 500 ETF a compelling long-term investment option.