Why iShares Core S&P 500 ETF Should be the Backbone of Your Portfolio

The iShares Core S&P 500 ETF (ticker: IVV) is a highly regarded investment vehicle that offers exposure to 500 of the largest U.S. companies. By tracking the S&P 500 index, this ETF provides investors with a diversified portfolio of large-cap stocks, representing approximately 80% of the U.S. equity market.

One of the standout features of IVV is its cost-effectiveness. The fund charges a minimal fee, allowing investors to retain more of their returns over time. This low expense ratio, combined with the fund’s broad diversification, has contributed to its strong performance. Notably, over the 10 years through January 2025, IVV outperformed its average large-blend peer by 2.23 percentage points annualized.

The ETF employs a market-cap-weighted approach, meaning companies are weighted according to their market capitalization. This methodology leverages the market’s collective assessment of each company’s value, resulting in low turnover and reduced trading costs. However, investors should be aware that this approach can lead to concentration in certain sectors or companies, especially during periods when a few firms drive market gains. As of December 2023, the top 10 holdings constituted 31% of the index, with a 30% allocation to technology stocks—the highest since the dot-com bubble.

For Canadian investors seeking similar exposure, the iShares Core S&P 500 Index ETF (ticker: XUS) is available on the Toronto Stock Exchange. XUS aims to replicate the performance of the S&P 500 and is hedged to the Canadian dollar, mitigating currency risk. This ETF provides a convenient option for those looking to invest in U.S. large-cap equities without the complexities of currency fluctuations.

Incorporating ETFs like IVV or XUS into a retirement portfolio can offer broad market exposure, diversification, and cost efficiency. However, it’s essential to consider individual financial goals, risk tolerance, and investment horizons when making such decisions. Consulting with a financial advisor can provide personalized guidance tailored to your retirement planning needs.

Why the iShares Core S&P 500 ETF is a Powerful Foundation for Your Retirement Portfolio

Investing in the right assets is crucial for achieving your retirement goals, and the iShares Core S&P 500 ETF (ticker: IVV) offers one of the most reliable and cost-effective ways to access the performance of 500 of the largest U.S. companies. By tracking the renowned S&P 500 Index, IVV provides broad diversification, capturing roughly 80% of the entire U.S. equity market, a compelling feature for Canadian investors seeking stable growth and long-term returns.

Key Benefits of the iShares Core S&P 500 ETF (IVV)

1. Cost Efficiency: IVV boasts an exceptionally low expense ratio, allowing investors to maximize returns over the long term. With minimal costs, investors retain more profits, significantly enhancing portfolio growth potential.

2. Strong Historical Performance: Over the past decade (as of January 2025), IVV outperformed the average large-blend fund by 2.23% annually. Such consistent outperformance demonstrates the fund’s ability to deliver reliable returns, even during market volatility.

3. Market-Cap-Weighted Approach: The fund follows a market-cap-weighted strategy, emphasizing companies according to their market value. This approach reduces turnover, keeps trading costs low, and leverages market efficiency. However, investors should consider potential sector concentration risks. For instance, as of December 2023, the top 10 holdings made up 31% of the index, with a significant allocation (30%) toward technology stocks.

Enhance Your Retirement Portfolio with Canada Retirement Plans

To fully leverage the power of ETFs like IVV, Canada Retirement Plans has partnered with Justwealth Financial, one of Canada’s premier digital wealth management providers. Justwealth’s expertly curated ETF portfolios include the iShares Core S&P 500 ETF, among other carefully selected funds, designed to optimize returns while managing risk.

Why Choose Justwealth Financial’s ETF Portfolios?

• Professional Management: Justwealth’s experienced portfolio managers continually monitor and rebalance your investments to align with your retirement goals.
• Personalized Strategy: Tailored ETF portfolios accommodate various risk profiles and investment objectives, ensuring a personalized retirement planning experience.
• Transparency & Convenience: Enjoy full visibility of your investments with straightforward online access, simplifying investment management and oversight.

Get Started Easily with Canada Retirement Plans

Interested investors can easily open their investment accounts through Canada Retirement Plans by clicking on the following secure link: Justwealth Financial Partnership – Canada Retirement Plans.

Take control of your retirement today. Partner with Justwealth Financial and Canada Retirement Plans, and build a solid financial future using powerful ETFs like the iShares Core S&P 500 ETF.