The iShares S&P 500 ETF (ASX: IVV) has been one of the best exchange-traded funds (ETFs) to own over the last 10 to 15 years. For several reasons, it's been a very effective investment for Aussie investors.
It provides exposure to a portfolio of 500 of the largest and most profitable businesses listed in Australia. You probably recognise some of the IVV ETF's largest positions, like Nvidia, Apple, Microsoft, Amazon.com, Alphabet, Broadcom, Meta Platforms, Tesla and Berkshire Hathaway.
Thankfully, these have been among the best blue-chip performers over the past several years. The ETF has heavily benefited from those gains, too, because an ETF simply passes along the returns of its holdings. It's great to get that investment exposure through the IVV ETF.
Let's take a look at how much the IVV ETF unit price has risen.
Strong returns by the IVV ETF
Over the last five years, the IVV ETF unit price has increased by more than 90%.
In terms of total returns, the IVV ETF returned an average of 14.5% per year between April 2021 and April 2026.
If an investor had put $10,000 into the ASX ETF five years ago, it would now be worth approximately $19,200. It could have been worth even more if the Australian dollar hadn't strengthened against the US dollar by around 10% over the last 12 months.
Of course, the dividend returns aren't captured in these numbers, though the yield isn't exactly huge, so it wouldn't make a gigantic difference.
If someone had invested $10,000 in IVV ETF units five years ago, they'd have been able to buy 274 units, with a bit of money left over (adjusted for the 15-to-1 split in December 2022).
How much an investor can buy now
Thanks to the significant capital growth over the past 12 months, investors can't buy as many iShares S&P 500 ETF units now as they could then.
With a $10,000 investment, an Australian investor could buy 142 IVV ETF units today.
Is it a good buy today?
We can't know for sure what the long-term returns will be. But the returns so far demonstrate the portfolio's quality.
The fund is invested in great businesses, many of which are investing heavily in developing new/better products and services that could unlock additional earnings growth. But remember this is a major bet on the US share market.
With an annual management fee very close to 0%, it's a very low-cost option for investors and an excellent index-investing option.
The post 5 years ago, $10,000 bought 274 iShares S&P 500 ETF (IVV) units. But how many would it buy now? appeared first on The Motley Fool Australia.
Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Alphabet, Amazon, Apple, Berkshire Hathaway, Broadcom, Meta Platforms, Microsoft, Nvidia, Tesla, and iShares S&P 500 ETF. The Motley Fool Australia has recommended Alphabet, Amazon, Apple, Berkshire Hathaway, Meta Platforms, Microsoft, Nvidia, and iShares S&P 500 ETF. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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