IVV vs VGS: All In on America, or the Whole Developed World?

🗺️ What each one actually holds🔗

IVV is the iShares S&P 500 ETF, issued by BlackRock and listed on the ASX since 2000. It gives you the five hundred largest listed American companies, weighted by size, which in practice means a portfolio led by the familiar names at the top of the US market.

VGS is the Vanguard MSCI Index International Shares ETF, tracking developed markets outside Australia across 23 countries. As at 31 July 2026 its largest holdings were Nvidia, Apple, Microsoft, Amazon and Alphabet.

Read that list again, because it is the whole point. The top of VGS looks like the top of IVV. The index weights by company size, American companies are the largest in the world, and so America ends up being 73.3% of a global developed markets fund, as at 14 September 2026, without anyone deciding it should be.

💰 Fees side by side🔗

IVV charges 0.04% a year. VGS charges 0.18%. Both are published figures, confirmed in September 2026 on the ASX listing page and Vanguard's own product page.

The 0.14 percentage point gap is roughly $70 a year on a $50,000 holding, and roughly $280 on $200,000. That is real money and it compounds.

🇺🇸 The case for going all in on the US🔗

You hold an actual view. If you think American listed companies will keep leading on scale and innovation, IVV expresses that without dilution. A view you hold on purpose is a legitimate reason to concentrate.

It is simple. One country, one index, the most widely tracked benchmark in the world. You will never be confused about what you own.

It is cheap. At 0.04% a year IVV is among the lowest cost funds on the ASX, and that difference quietly compounds across decades.

It pairs cleanly. IVV next to an Australian fund gives you a two market portfolio that is easy to hold and easy to rebalance.

⚠️ The case against🔗

One country is one country. The United States has had an exceptional stretch. Nothing guarantees the next one, and a long period of American underperformance would land on IVV with nothing to cushion it.

The S&P 500 is itself concentrated. Five hundred companies sounds broad, but size weighting means the largest handful dominate. You are not buying five hundred equal bets.

Currency is part of the bet. IVV is entirely US dollar exposure, so a sustained rise in the Australian dollar drags on your returns regardless of how the underlying companies perform.

🎯 The essential: None of this makes IVV a poor choice. It makes concentration a decision rather than a default. The risk is not choosing it, the risk is choosing it without noticing you have.

🌏 What you give up🔗

The non-American part of VGS is not padding. It is Japan, the United Kingdom, Canada, Switzerland, France, Germany and the rest of the developed world: global exporters, energy majors, pharmaceutical groups, luxury houses, industrial machinery.

These markets do not move in lockstep with American technology. When US tech sells off, European industrials or Japanese exporters sometimes hold up better. That is the entire diversification argument, and it is a modest effect rather than a magic one, because the American weighting is still doing most of the work.

Worth knowing what is still missing: VGS covers developed markets only. China, India, Taiwan and Brazil are not in there. If you want them you need something like an emerging markets fund as well.

💱 You are buying US dollars either way🔗

Both funds are unhedged, so your returns in Australian dollars move with the exchange rate as well as with share prices.

For IVV that is simple: entirely US dollars. For VGS it looks more varied on paper, with yen, pounds, euros and Canadian dollars in the mix, but because America is the large majority of the fund, the US dollar is still the dominant driver.

So the idea that VGS gives you real currency diversification is only partly true. It softens the exposure, it does not remove it. If you want the currency risk taken out, that means a hedged product, which is a different decision with its own costs. Our guide to hedged versus unhedged covers that trade-off.

🤔 Does holding both make sense?🔗

Ask this one honestly. If you hold both, the large majority of your VGS is in the same companies as your IVV. You have not doubled your diversification, you have mostly increased your American weighting and added a modest international slice.

That can still be deliberate. Some people hold IVV as the core and add VGS specifically to pick up Japan, the UK and Europe. If that is the plan, size the two positions on purpose. Holding both without doing that arithmetic is how a portfolio ends up feeling diversified while being a concentrated bet wearing a disguise.

🧩 Next to an Australian ETF🔗

Most Australians already carry a home bias through their super, so the international fund is usually the balancing act.

IVV next to VAS or A200 gives you two markets, Australia and the United States. Cheap, simple, and completely silent on the rest of the world.

VGS next to the same gives you Australia plus twenty three developed markets, for a little more in fees and a little less simplicity.

Neither is wrong. One is a tighter bet held on purpose, the other is a wider net. Our guide to building a simple portfolio walks through choosing the split.

⚖️ Side by side🔗

❓ Frequently asked questions🔗