What you need to know about next week's iShares S&P 500 ETF (IVV) stock split

This ETF is about to do a stock split. Here's what you need to know…

| More on:
A woman sits at her computer with her chin resting on her hand as she contemplates her next potential investment.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Stock splits, while popular in the United States, are a relatively rare occurrence for ASX shares. Perhaps it's our lack of $2,000 shares which, until recently, were sported by both Amazon.com Inc and Alphabet Inc (parent company of Google). Or perhaps it's just a cultural preference. But what is even rarer is an ETF stock split.

Exchange-traded funds (ETFs) technically don't have shares. Instead, investors buy units of ETFs. That's because they are buying into a trust, not a company.

But, just like shares, units can get expensive over time as well. And just like with a share, an ETF provider can order a stock split of its units.

That's exactly what is happening with the iShares S&P 500 ETF (ASX: IVV) very soon.

S&P 500 ETF to undergo stock split

The iShares S&P 500 ETF is one of the most popular international ETFs on the ASX. It invests in a portfolio tracking the S&P 500 Index. This is the most dominant index representing the US market. It's also the most widely tracked index in the world.

Everyone who's anyone in the US markets can probably be found in the S&P 500. Apple, Amazon and Alphabet are all there. As are Ford, Microsoft, Coca-Cola, Tesla, and McDonald's.

Yet today, one unit of the iShares S&P 500 ETF will cost an ASX investor $598.65 – no mere chunk of change. By comparison, one unit of the Australian-focused iShares Core S&P/ASX 200 ETF (ASX: IOZ) will only set an investor back $29.18 right now.

But this is about to change. Last week, BlackRock, the ETF provider behind these two funds, announced a stock split for the iShares S&P 500 ETF. This will be a 15:1 split, which will see each unit of the ETF become 15 units.

This will have the effect of lowering the cost of one unit by a factor of 15 times, with all unitholders getting 15 times as many shares as they currently own in compensation.

So if an investor owns a single share of the iShares S&P 500 ETF today, valued at $598.65, they will own 15 units, each worth $39.91, following the split. Overall, the investor won't see either an increase or decrease in their overall position.

IVV or IVVDB?

The last day that units of the iShares S&P 500 ETF will trade on a pre-split basis will be 6 December. Trading will then commence the following day on a post-split basis.

However, this ETF will temporarily use the ticker code IVVDB while trading on a deferred settlement arrangement from 6 December onwards. The ETF will only return to its old code of IVV and to normal trading on 13 December.

So if you own units of the iShares S&P 500 ETF, get ready to own a lot more at a far lower unit price.

Wondering where you should invest $1,000 right now?

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for over ten years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes could be the 'five best ASX stocks' for investors to buy right now. We believe these stocks are trading at attractive prices and Scott thinks they could be great buys right now...

See The 5 Stocks *Returns as of 30 April 2025

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Motley Fool contributor Sebastian Bowen has positions in Alphabet (A shares), Amazon, Apple, Coca-Cola, McDonald's, Microsoft, and Tesla. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Alphabet (A shares), Alphabet (C shares), Amazon, Apple, Microsoft, and Tesla. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has recommended the following options: long January 2024 $47.50 calls on Coca-Cola, long March 2023 $120 calls on Apple, and short March 2023 $130 calls on Apple. The Motley Fool Australia has recommended Alphabet (A shares), Alphabet (C shares), Amazon, Apple, and iShares Trust - iShares Core 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.

More on ETFs

share buyers, investors, happy investors
ETFs

How I would build a $100,000 portfolio with ASX ETFs today

You don't need more than three ETFs to build a diversified portfolio...

Read more »

A young couple sits at their kitchen table looking at documents with a laptop open in front of them while they consider the state of their investments.
ETFs

3 reasons why the Vanguard MSCI Index International Shares ETF (VGS) is a strong long-term buy

I think this ETF is an excellent investment for a few different reasons.

Read more »

Woman with $50 notes in her hand thinking, symbolising dividends.
ETFs

$10,000 invested in DHHF ETF a year ago is now worth…

Has this all-world, all-growth ASX ETF delivered the goods?

Read more »

a man smiles broadly as he holds up five fingers on one hand and two fingers on the other hand.
ETFs

7 excellent ASX ETFs to buy and hold until 2035

When it comes to building long-term wealth, few strategies are as effective — or as simple — as buying high-quality…

Read more »

A smiling woman sits in a cafe reading a story on her phone about Rio Tinto and drinking a coffee with a laptop open in front of her.
ETFs

3 strong ASX ETFs for beginners to buy now

Starting your investment journey? Check out these funds.

Read more »

Smiling child playing video game
ETFs

Guess which ASX ETF is up 72% over the past 12 months?

This ASX ETF has been a home run lately.

Read more »

ETFs

Why Betashares Nasdaq 100 ETF and these ASX ETFs could be strong buys

Let's see what makes these funds stand out.

Read more »

The letters ETF sit in orange on top of a chart with a magnifying glass held over the top of it
Dividend Investing

Boosting passive income: With a 7.6% yield, is the YMAX ETF a good option?

Is this ETF's yield too good to be true?

Read more »