The iShares S&P 500 ETF (ASX: IVV) is one of the most popular internationally-focused exchange-traded funds (ETFs) on the ASX. That is not surprising. The S&P 500 Index is the most widely tracked index in the world.
It is the index that Warren Buffet himself has endorsed on multiple occasions. Buffett even plans to have some of his wealth placed in an S&P 500 ETF when he shuffles off this mortal coil.
What's more is that the IVV ETF is the only S&P 500-tracking fund on the ASX. So it has what could be described as a monopoly holding on this corner of the world markets here in Australia.
But how has this US-based ETF performed for investors in 2023 so far? The answer might surprise you.
If an investor put $5,000 into the iShares S&P 500 ETF at the start of the year, they would have bought in when the fund was asking $37.83 per unit. As such, that $5,000 would have bought 132 IVV units, with some change to spare.
Today, those same IVV units are going for a much-improved price of $43.02 each. So our 132 units would be worth just over $5,678 at this pricing. That represents a return of 13.72%. Not bad for just over five months of waiting.
It certainly looks a lot better than the return of an S&P/ASX 200 Index (ASX: XJO)-based ETF, as you can see below:
Investors also would have bagged not one, but two dividend distributions over this period. There was the January distribution worth 12.62 cents per unit, as well as the April distribution, which came in at 14.22 cents per unit. These distributions would have edged up investors' returns even higher.
How has the iShares IVV ETF given investors such a pleasing return in 2023?
So how has this ETF been able to deliver such a solid return for its investors over the year to date? Well, we only have to look at its holdings. The iShares S&P 500 ETF tracks the S&P 500 Index, which consists of the 500 largest companies listed on the US markets.
But in reality, its performance is dominated by a handful of US tech giants. These include Apple Inc (NASDAQ: AAPL), Microsoft Corporation (NASDAQ: MSFT), Alphabet Inc (NASDAQ: GOOG)(NASDAQ: GOOGL), Amazon.com Inc (NASDAQ: AMZN), and NVIDIA Corporation (NASDAQ: NVDA).
All five of these stocks have had years to remember so far in 2023. Apple shares are up almost 50%. Microsoft has risen by 40.8%, while Alphabet's Class A shares have given investors a 38.8% return. Amazon has rocketed by 47.3%, while NVIDIA has shot the lights out with its 200% return.
Together, these five tech stocks make up close to a quarter of IVV's weighted portfolio. So it's no surprise to see the entire ETF performing well over the same period.
Let's see how the rest of the year goes for ASX investors of the iShares S&P 500 ETF.
