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ETF in Focus: iShares S&P 500 ETF (IVV)

Australia’s most popular US equities ETF could benefit from continuing gains in the US market this year, with strong earnings supported by a deregulatory domestic policy agenda.
iShares by BlackRock
05 February 2025
Created by potrace 1.15, written by Peter Selinger 2001-2017 2 min read

James Waterworth, Director – Wealth, BlackRock Australia

In 2024, US equities returned over 23%, just slightly less than 2023’s results. This marked the first time since the late 1990s that the S&P 500 benchmark has gained more than 20% in two straight years.2

So far this year, the continued outsized growth of the Magnificent 7 tech stocks, along with lower interest rates and the deregulatory agenda of the new administration, has continued to boost the US market. By January 23rd, just three weeks into the trading year, the S&P 500 reached a new high of 6118.713  as the major US banks reported their second most profitable year ever4 and markets reacted positively to President Trump's initial policy proposals. 

Although some major tech companies have recently seen declines due to competition from Chinese AI lab DeepSeek, investors appear to be largely optimistic about the long-term prospects for US stocks. Last year, the iShares S&P 500 ETF (IVV) saw record inflows of $2.1 billion, making it the most popular ASX-listed ETF for US market access.5 In January to date, investors have already added more than $215 million to IVV. 6

Can US equities keep soaring? 

It's not surprising that some investors might wonder if US shares could lose momentum. When looking at the S&P 500’s price-to-earnings ratio over the last century, the index has only reached the current high levels a few times before – just before the 1929 crash, the 2000 dot-com bust, and during the extreme volatility of the COVID crisis.7

Despite this, fundamentals and sentiment are holding up when it comes to the US equity market. A recent survey of BlackRock global investment professionals reveals more than 60% believe the US is the best market for above-average returns in 2025.8

With S&P 500 earnings growth projected at around 14% for 20259, expected rate cuts from the Federal Reserve, and strong economic growth, conditions still favour further gains.


Source: BlackRock Investment Institute and LSEG Datastream, 29 January 2025. 12-month forward profit margin as calculated by 12-month forward total earnings divided by sales. US represented by MSCI USA Index. Europe represented by MSCI Europe Index.

The new US administration's policy agenda could boost key sectors like financials and energy by decreasing regulation and making it easier to build energy infrastructure, though it may also risk persistent inflation. 

Additionally, we see the AI theme continuing to play out in the US long-term, meaning stock valuations might not follow the usual patterns – for instance, the big tech companies may grow their revenues, in turn justifying their lofty valuations.

Why the S&P 500 in 2025

So which sectors will benefit from the current US economic environment? We expect continued strong earnings from major tech companies. and are comfortable with the current AI-driven market scenario which drove last year’s healthy returns. However, we also anticipate growth in other sectors and industries due to the political climate and lower interest rates in the US.

With an over 30% weighting to technology and a long-term track record of over 15% annual returns, the S&P 500 Index is a simple and powerful option for investors to access the innovative companies driving equity market growth in the US10. As a key measure of US equity market performance, covering about 80% of market value, the index also offers diversified growth opportunities as earnings rise in other sectors.11

Offering affordable US market access compared to peers12 through tracking the S&P 500 Index, IVV serves as a useful ‘building block’ for a core global equities portfolio. With deregulation and corporate tax cuts potentially on the horizon, and the expanding AI theme, now may be an ideal time for investors to add US equity exposure.

  1. Source: Australian Financial Review, 3 January 2025 – based on calendar year 2024 Australian ETF industry net flows
  2. Source: Bloomberg, 31 December 2024. Past performance is not a reliable indicator of future performance. Index performance returns do not reflect any management fees, transaction costs or expenses. Indexes are unmanaged and one cannot invest directly in an index.
  3. Source: CNBC, 23 January 2025. Past performance is not a reliable indicator of future performance. Index performance returns do not reflect any management fees, transaction costs or expenses. Indexes are unmanaged and one cannot invest directly in an index.
  4. Source: Bloomberg, 15 January 2025
  5. Source: Australian Financial Review, 3 January 2025 – based on calendar year 2024 Australian ETF industry net flows
  6. Source: BlackRock data as of 28 January 2025
  7. Source: BlackRock Investment Institute and LSEG Datastream, November 2024.
  8. Source: BlackRock Investment Institute as of 15 November 2024, based on a survey of approximately 100 2025 BII Outlook Forum attendees.
  9. Source: BlackRock and LSEG Datastream data as of 27 January 2025. Forecasts may not come to pass.
  10. Source: BlackRock data as at 31 December 2024, based on average annualised returns over a 10-year period. Past performance is not a reliable indicator of future performance. Index performance returns do not reflect any management fees, transaction costs or expenses. Indexes are unmanaged and one cannot invest directly in an index.
  11. Diversification and asset allocation may not fully protect you from market risk.
  12. Average MER of ASX-listed US equity ETPs in the ‘Equity-Global’ product category: 0.19%.

Product details

iShares S&P 500 ETF (IVV)
https://www.blackrock.com/au/products/275304/

This product is likely to be appropriate for a consumer:
• who is seeking capital growth and/or income distribution
• using the product for a core component of their portfolio or less
• with a minimum investment timeframe of 5 years, and
• with a medium to high risk/return profile

Opinions are subject to change and they are not a guarantee of future results. This information should not be relied upon as research, investment advice or a recommendation.

This information has been provided by BlackRock Investment Management (Australia) Limited (BIMAL) for WealthHub Securities Limited (WSL) (ABN 83 089 718 249)(AFSL No. 230704). WSL is a Market Participant under the ASIC Market Integrity Rules and a wholly owned subsidiary of National Australia Bank Limited (ABN 12 004 044 937)(AFSL No. 230686) (NAB). NAB doesn’t guarantee its subsidiaries’ obligations or performance, or the products or services its subsidiaries offer.  This material is intended to provide general advice only. It has been prepared without having regard to or taking into account any particular investor’s objectives, financial situation and/or needs. All investors should therefore consider the appropriateness of the advice, in light of their own objectives, financial situation and/or needs, before acting on the advice.  Past performance is not a reliable indicator of future performance.  Any comments, suggestions or views presented do not reflect the views of WSL and/or NAB.  Subject to any terms implied by law and which cannot be excluded, neither WSL nor NAB shall be liable for any errors, omissions, defects or misrepresentations in the information or general advice including any third party sourced data (including by reasons of negligence, negligent misstatement or otherwise) or for any loss or damage (whether direct or indirect) suffered by persons who use or rely on the general advice or information. If any law prohibits the exclusion of such liability, WSL and NAB limit its liability to the re-supply of the information, provided that such limitation is permitted by law and is fair and reasonable. For more information, please click here.

Important Information: This material has been created with the co-operation of BlackRock Investment Management (Australia) Limited (BIMAL) ABN 13 006 165 975, AFSL 230 523 on 3 February 2025. Comments made by BIMAL employees here represent BIMAL’s views only. This material provides general advice only and does not take into account your individual objectives, financial situation, needs or circumstances. Before making any investment decision, you should obtain financial advice tailored to you having regard to your individual objectives, financial situation, needs and circumstances. Refer to BIMAL’s Financial Services Guide on its website for more information. This material is not a financial product recommendation or an offer or solicitation with respect to the purchase or sale of any financial product in any jurisdiction.
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About the Author
iShares by BlackRock

iShares unlocks opportunity across markets to meet the evolving needs of investors. With more than twenty years of experience, a global line-up of 1500+ exchange traded funds (ETFs) and $4.2 trillion in assets under management as of December 31, 2024, iShares continues to drive progress for the financial industry. iShares funds are powered by the expert portfolio and risk management of BlackRock.