The iShares S&P 500 ETF (ASX: IVV) continues to be a strong candidate for long-term investment, offering exposure to the performance of the S&P 500, which comprises 500 of the largest companies in the United States. Over the past decade, the fund has achieved an impressive average annual net return of 15.3% as of August 31, 2025. This remarkable performance raises the question of whether it remains a viable option for investors.
Favorable Economic Conditions
Interest rates have a significant impact on stock valuations, and recent trends suggest a more favorable environment for equities. After a period of rising rates aimed at controlling inflation, the US Federal Reserve recently lowered the Federal Funds Rate by 25 basis points to a range of 4% to 4.25%. Analysts anticipate further cuts in the coming year as the central bank responds to signs of a weakening job market.
Lower interest rates can act as a catalyst for higher asset prices. As borrowing costs decrease, companies may see improved earnings potential, which can boost share prices. If this trend continues, it could provide a significant advantage for investors holding shares in the IVV ETF.
Strong Portfolio of Companies
The IVV ETF is composed of industry-leading companies that have consistently demonstrated growth and innovation. Major players such as Nvidia, Microsoft, Apple, Amazon, and Meta Platforms are at the forefront of advancements in technology, including artificial intelligence, cloud computing, and e-commerce.
These companies are not only leaders in their respective fields, but they also continue to invest heavily in research and development. Other notable firms within the ETF include Berkshire Hathaway, JPMorgan Chase, and Walmart, all of which have a track record of strong returns on equity and growth potential.
Investing in the IVV ETF means aligning with some of the world’s most successful businesses, which can enhance the long-term viability of an investment portfolio.
Low Management Fees Enhance Returns
One of the attractive features of the iShares S&P 500 ETF is its remarkably low annual management fee of just 0.04%. This minimal fee structure ensures that a larger portion of the investment returns remains with the investor, thereby promoting stronger compounding over time.
With the combination of a solid portfolio, favorable economic conditions, and low fees, the IVV ETF offers an appealing option for those considering long-term investments in the stock market. As investors seek to build wealth over time, maintaining a diversified portfolio that includes the IVV ETF could be a wise strategy for growth.
The insights provided here are based on a general investment perspective and should be evaluated in the context of individual financial goals and market conditions. While past performance is not an indicator of future results, the attributes of the IVV ETF make it a compelling choice for long-term investors looking to capitalize on the growth of the US economy.
