Why SPLG is the Ultimate S&P 500 ETF for Long-Term Investors in 2025

When it comes to building a long-term portfolio, the devil is in the details—specifically, the fees you pay, the taxes you owe, and the precision of your market exposure. In 2025, one ETF stands out as the clear winner in all three categories: the SPDR® Portfolio S&P 500® ETF (SPLG). With a razor-thin expense ratio of 0.02%, near-perfect tracking of the S&P 500, and lightning-fast liquidity, SPLG isn't just a strong contender—it's the ultimate core holding for buy-and-hold investors. Let's break down why this low-cost marvel deserves a spot in every long-term portfolio.

Cost Efficiency: Pay Less, Keep More

The S&P 500 has long been the gold standard for passive investing, but the fees you pay to access it can eat into your returns. Enter SPLG, which charges just 0.02%, the lowest expense ratio among the three most popular S&P 500 ETFs. For context, SPY (SPDR S&P 500 ETF Trust) charges 0.09%, and VOO (Vanguard S&P 500 ETF) comes in at 0.03%. Over a 20-year horizon, those differences add up. A $100,000 investment in SPLG would outperform SPY by roughly $7,300 in final value, assuming identical market returns.

Why does this matter? Because every basis point saved compounds over time. For long-term investors, especially those in retirement accounts or tax-advantaged accounts, minimizing fees is non-negotiable. SPLG's cost structure is a masterclass in efficiency, and it's hard to argue with the math.

Tax Advantages: Keep More of What You Earn

Tax efficiency is another critical factor for long-term investors. SPLG's structure as a traditional ETF gives it a clear edge over SPY, which is a unit investment trust (UIT). Unlike SPY, SPLG can reinvest dividends and manage capital gains more flexibly, reducing taxable events for investors. VOO, also a traditional ETF, shares this advantage, but SPLG's even lower expense ratio gives it a slight edge.

For example, SPY's UIT structure often leads to capital gains distributions that can't be avoided, whereas SPLG and VOO can defer or minimize these distributions through in-kind redemptions. This means investors in SPLG are less likely to face unexpected tax bills, making it a cleaner, more predictable option for long-term growth.

Market Exposure Precision: You're Getting Exactly What You Pay For

Tracking error—the deviation between an ETF's performance and its benchmark—is a silent killer for long-term returns. SPLG's 0.01% bid-ask spread and minimal tracking error ensure that investors get nearly 100% of the S&P 500's returns. Compare this to SPY's slightly wider spreads and VOO's modestly higher tracking error, and SPLG emerges as the most precise tool in the box.

This precision is critical for buy-and-hold investors. Over decades, even minor deviations can compound into significant losses. SPLG's near-perfect alignment with the S&P 500 ensures that investors aren't left holding a slightly diluted version of the market.

The Verdict: SPLG Wins the Triple Threat

So, where does that leave us? For long-term investors, the choice is clear: SPLG is the best S&P 500 ETF in 2025. It's the only fund that combines ultra-low costs, tax-efficient structure, and rock-solid tracking precision. SPY's liquidity is unmatched for traders, but its high fees and structural inefficiencies make it a poor fit for long-term portfolios. VOO is a strong contender, but SPLG's cost advantage gives it the edge.

If you're building a core holding for the next 20 years, cut the noise and go with SPLG. It's the most efficient, most precise, and most cost-effective way to own the S&P 500—and that's exactly what every long-term investor should want.

Action Plan for Investors:
1. Allocate 50-70% of your equity portfolio to SPLG for broad, low-cost exposure to the U.S. market.
2. Rebalance annually to maintain your asset allocation, leveraging SPLG's liquidity and low tracking error.
3. Hold for the long term—the compounding of SPLG's cost savings and precise tracking will pay dividends (literally and figuratively) over decades.

In 2025, the S&P 500 remains the bedrock of American investing. With SPLG, you're not just buying the market—you're buying it better.