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So is there an advantage to holding a position in SPY vs. a position in an S&P 500 mutual fund INSIDE a Roth IRA (assuming one would want such a position within a Roth)?

They are so similar that other issue will probably be the determining factor. For instance, you might have your Roth IRA at E*Trade, but they charge a hefty fee to buy Vanguard funds. In that case, SPY would be better. If you had your IRA at Vanguard, then VFINX would be the choice.

If both cost the same to buy, dividend reinvestment might be important. You can reinvest dividends in VFINX at no cost. At E*Trade you can't have SPY dividends reinvested, and each time you buy more, you pay the $14.95 commission.

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