Key points (as at Q2 2026)
- IVV holds 100% United States large caps (the S&P 500). VGS holds approximately 1,275 developed-market companies and is approximately 73.1% US.
- Because VGS is already mostly US, holding IVV and VGS increases your US tilt rather than adding much diversification.
- Fees: IVV 0.04% p.a., VGS 0.18% p.a.. Neither holds Australian shares or emerging markets.
- General information only, not financial advice. Past performance is not a reliable indicator of future returns.
Last updated: Q2 2026. Figures are computed from ETFLens data as at Q2 2026, sourced from each issuer's published disclosure documents and reviewed quarterly.
"IVV or VGS?" is one of the most common questions among Australian index investors, and it is usually framed as "US shares or global shares?". But that framing hides the most important fact: VGS is already approximately 73.1% United States companies. So the real question is not "US or global" — it is how much US tilt do you actually want?
This comparison uses live ETFLens data to show what each fund holds, how much they overlap, and what that means if you are tempted to hold both. It does not tell you which to buy. This article is general information only and not personal financial advice. ETFLens does not hold an Australian Financial Services Licence (AFSL).
What each ETF actually holds
IVV tracks the S&P 500: 503 of the largest United States companies, across every sector. Its biggest positions are Nvidia (8.5%), Apple (6.88%), Microsoft (4.95%), Amazon (4.07%), Alphabet Class A (3.64%). Geographically it is 100% US.
VGS tracks the MSCI World ex-Australia index: approximately 1,275 companies across developed markets globally. Its largest holdings are NVIDIA Corp (5.6%), Alphabet Inc (4.61%), Apple Inc (3.33%), Microsoft Corp (2.95%), Amazon.com Inc (2.59%) — largely the same US mega-caps that dominate IVV. The difference is what sits underneath them: VGS adds Japan, the United Kingdom, Europe, Canada and other developed markets. As at Q2 2026, the United States makes up approximately 73.1% of VGS, with the remainder spread across roughly a dozen other countries.
| Feature | IVV | VGS |
|---|---|---|
| Index | S&P 500 | MSCI World ex-Australia |
| Holdings | 503 | 1,275 |
| US weight | 100% | approximately 73.1% |
| MER | 0.04% p.a. | 0.18% p.a. |
| Fund size | $13.4B | $15.5B |
| Distribution yield | approximately 1.1% | approximately 1.6% |
| Distributions | Quarterly | Quarterly |
The overlap question: how much are you doubling up?
This is where the "US or global" framing breaks down. Because VGS is approximately 73.1% US, its biggest holdings are the same companies IVV holds. Nvidia (8.5%), Apple (6.88%), Microsoft (4.95%) sit near the top of both funds. An investor who buys IVV and VGS is buying those companies twice — once directly through IVV, and again through the US portion of VGS.
That is not necessarily a problem, but it is worth understanding. Adding IVV on top of VGS does not give you much new exposure; it concentrates what you already have into the United States, and specifically into US large-cap technology. It is the opposite of what many investors assume they are doing when they "diversify" by adding a second fund.
See the real overlap between IVV and VGS
The ETFLens overlap checker calculates the approximate proportion of holdings these two funds share, using live data — so you can see exactly how much you would be doubling up.
Check IVV vs VGS overlap →This is the kind of question a generic "best ETF" article cannot answer, because it depends on the actual holdings of both funds at a point in time. ETFLens computes it from the live data. Whether the resulting concentration suits you is a personal question ETFLens cannot assess.
Fees compared
IVV charges 0.04% p.a. and VGS charges 0.18% p.a.. VGS costs more because building and maintaining a ~1,275-company global index across many markets is more involved than tracking 500 US companies. The table shows the approximate annual cost of each at three portfolio sizes (amount × MER ÷ 100).
| Investment | IVV (0.04%) | VGS (0.18%) |
|---|---|---|
| $10,000 | $4/yr | $18/yr |
| $50,000 | $20/yr | $90/yr |
| $100,000 | $40/yr | $180/yr |
The fee gap buys you geographic diversification across developed markets. Whether that is worth the difference is a judgement only you can make. The Fee Analyser models the long-run impact, and the full IVV vs VGS comparison shows both funds side by side.
Geographic diversification trade-off
IVV is a concentrated bet on the United States: 100% US, with a heavy technology weighting (information technology is approximately 32.84% of the fund). VGS spreads its remaining ~27% outside the US across Japan, the UK, Europe, Canada and other developed economies, which can behave differently from the US market at times.
Two things both funds leave out are worth flagging. Neither holds Australian shares — for that, investors typically add a fund such as VAS or A200 (see the VAS vs VGS guide for the common two-fund structure). And neither holds emerging markets — for non-US international exposure beyond developed markets, the VGS vs VEU guide covers the difference.
Sector differences beneath the surface
Because they share so many top holdings, the two funds look similar at the very top — but their sector mix differs once you look past the mega-caps. IVV is 100% US and carries a heavy technology weighting; VGS spreads across more sectors and regions, which softens (but does not remove) that tilt.
| Sector | IVV | VGS |
|---|---|---|
| Information Technology | approximately 32.84% | approximately 28.1% |
| Financials | approximately 12.57% | approximately 15.5% |
| Health Care | approximately 9.45% | approximately 8.8% |
| Industrials | approximately 9% | approximately 11.9% |
| Consumer Discretionary | approximately 9.84% | approximately 9.4% |
VGS carries a higher financials weight and a somewhat lower technology weight than IVV, reflecting the European, Japanese and other developed-market companies it adds. The differences are real but modest — a reminder that VGS is best thought of as a more diversified version of a US-heavy portfolio, not a fundamentally different one. Sector weights change over time and are shown as approximate figures as at Q2 2026.
How each fits in a portfolio
Neither IVV nor VGS is a complete portfolio on its own — both deliberately exclude Australian shares, and both exclude emerging markets. How investors typically use them differs:
- VGS is often used as the international "core" of a two-fund portfolio, paired with an Australian fund such as VAS or A200 to add the home market. The VAS vs VGS structure is one of the most widely discussed approaches among Australian index investors, precisely because the two funds barely overlap.
- IVV is more often used as a deliberate United States tilt — either on its own for someone who wants concentrated US exposure, or added to a global fund by an investor who specifically wants to overweight the US beyond its natural global weight.
The key point is that adding IVV to a portfolio that already holds VGS is a decision to increase US concentration, because VGS already supplies a large US allocation. That can be a deliberate, reasonable choice — but it should be a conscious one, not an accident of thinking "two funds means more diversified". Whether any of these structures suits you depends on your objectives and circumstances, which ETFLens cannot assess.
Common mistakes when comparing IVV and VGS
A few recurring misunderstandings are worth naming:
- Treating VGS as "everything except the US". The opposite is closer to the truth — VGS is approximately 73.1% US. It is a US-heavy global fund, not a US-free one.
- Assuming a second fund automatically adds diversification. Because of the overlap, adding IVV to VGS concentrates rather than diversifies. The overlap checker makes this visible.
- Choosing on recent returns. Past performance reflects a particular period and is not a reliable indicator of future returns — selecting a fund because it has done well lately is one of the most common investing mistakes.
- Ignoring currency. Both funds are unhedged, so the AUD/USD exchange rate affects returns in Australian-dollar terms. Neither removes that exposure.
Historical returns (with the disclaimer that applies to every figure)
As at Q2 2026, ETFLens shows reported returns of approximately 16.4% (1yr), 17.2% p.a. (3yr) and 14.2% p.a. (5yr) for IVV, and approximately 15.1% (1yr), 16.1% p.a. (3yr) and 12.8% p.a. (5yr) for VGS. Past performance is not a reliable indicator of future returns.
It would be a mistake to choose between the funds on these numbers. They reflect a specific period in which US large caps performed strongly, and they include the effect of the AUD/USD exchange rate on both unhedged funds. ETFLens does not draw conclusions from past returns or project them forward.
Who each may suit
ETFLens does not recommend funds. As a neutral, general description:
- IVV may suit investors who want pure United States large-cap exposure at one of the lowest MERs on the ASX, and who are comfortable with 100% US concentration and full currency exposure.
- VGS may suit investors who want developed-market diversification beyond the US in a single fund, and who accept a higher fee and a still-substantial US weighting in exchange.
Whether either is appropriate depends on your objectives, situation and needs, which ETFLens cannot assess. If you are also deciding how to access the S&P 500 itself (hedged or unhedged), see the S&P 500 ETF Australia guide.
This article is general information only and not personal financial advice. ETFLens does not hold an Australian Financial Services Licence (AFSL). Consider your own objectives, financial situation and needs, or speak with a licensed financial adviser before making investment decisions. Past performance is not a reliable indicator of future returns.