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How to invest in the S&P 500

Ways to invest in one of the world's most popular stock indices from Canada, plus a list of the best S&P 500 ETFs.

What’s the best S&P 500 ETF?

Here are some of the best performing S&P 500 ETFs:

FundFee1 year growth5 year growthLink to invest
Amundi ETF S&P 500 UCITS ETF USD0.15%+10.16%N/ABuy 500U on CIBC Investor's Edge
Invesco S&P 500® Equal Weight ETF (RSP)0.2%+1.08%+12.24%Buy RSP on CIBC Investor's Edge
iShares Core S&P 500 ETF (IVV)0.03%-4.90%+60.88%Buy IVV on Interactive Brokers
SPDR S&P 500 ETF Trust (SPY)0.09%-4.80%+61.55%Buy SPY on Interactive Brokers
Vanguard S&P 500 ETF (VOO)0.07%-4.10%+62.48%Buy VOO on Interactive Brokers
iShares S&P 500 Growth ETF (IVW)0.18%-6.64%+81.81%Buy IVW on Interactive Brokers
Schwab U.S. Large Cap ETF (SCHX)0.03%-6.14%+61.22%Buy SCHX on Interactive Brokers
Xtrackers S&P 500 Swap UCITS ETF 1C0.15%-3.12%+79.66%Buy XSPU on Interactive Brokers
The information above is current as of May 12, 2022.

Can I invest in the S&P 500 from Canada?

Yes, there are a number of ways you can invest in the S&P 500 from Canada. The S&P 500 is a stock market index that tracks the performance of 500 leading U.S. companies that are listed on the stock exchange. This means you can’t directly invest in the S&P 500, but can buy stocks in the companies that make up the S&P 500 or buy an index fund, such as a mutual or exchange traded fund that tracks the overall performance of the S&P 500 index.

How to invest in the S&P 500

  1. Choose between ETFs and mutual funds. You can invest in index funds through ETFs or mutual funds, but ETFs have no minimum hold times, no minimum purchase amounts, and lower MER fees.
  2. Find an S&P 500 index fund to invest in. Some index funds track the performance of all 500 S&P stocks, whereas others only track a certain number of stocks or are weighted more towards specific stocks.
  3. Open a trading account. In order to invest in an S&P 500 fund, you’ll need to open a trading account with a broker or platform. Keep in mind that some index funds may only be available on certain brokerages or platforms.
  4. Deposit funds. You’ll need to deposit funds into your account to begin trading. Some brokers may charge you deposit fees, or you may need to pay a forex fee in order for your Canadian dollars to be converted into U.S. dollars.
  5. Buy the index fund. Once your money has been deposited, you can then buy the S&P 500 index fund. You’ll generally pay a small annual fee to invest in an index fund. For instance, the popular Vanguard S&P 500 ETF (VOO) charges a fee of 0.03%.

Is now a good time to invest in the S&P 500?

Historically, the S&P 500 has had an average annual compounded return of 7.5%. Since 2009, the index has been profitable every year up to 2019 except for 2018.

However, with inflation, rising interest rates and economic instability concerning investors, the S&P 500 ended below 4,000 on Monday May 9th for the first time since late March 2021. The S&P 500 is now down 16.3% year to date.

Remember that the S&P 500 tracks large cap U.S. companies, so if the overall U.S. (and global) economy is down, indices that track the market will be as well.

Invest in S&P 500 stocks

An alternative way of investing in the S&P 500 is to buy individual stocks in the 500 companies listed in the index. You could choose to buy shares in certain companies or buy one share in each to get a truly diversified S&P 500 portfolio (though this will be a lot of buying and selling for you!).

However, this will be a very expensive method of investing as you may need to pay trading fees on every single stock you purchase. Some of the stocks in the S&P 500 are also valued in the hundreds of dollars, so you’d need to invest thousands of Canadian dollars in order to get exposure to all companies in the index.

If you’re looking to diversify your portfolio by investing in the companies in the S&P 500, it’s likely going to be a lot cheaper and more efficient to buy an S&P 500 ETF or index fund.

Exchange traded funds (ETFs)

What stocks are in the S&P 500?

The S&P 500 comprises 500 of the largest US companies by market capitalization, which means it includes some of the most recognizable and popular stocks in the world. Tech stocks make up a huge part of the S&P 500. Stocks include:

Compare trading platforms to invest in the S&P 500

1 - 6 of 6
Name Product Finder Rating Stock Trading Fee Account Fee Available Asset Types Offer
CIBC Investor's Edge
Finder Rating:
★★★★★
4 / 5
$4.95 - $6.95
$0 if conditions met, otherwise $100/year
Stocks, Bonds, Options, Mutual Funds, ETFs
FREE TRADES
Wealthsimple Trade
Finder Rating:
★★★★★
3.9 / 5
$0
$0
Stocks, ETFs
Get 2 free stocks when you deposit and trade $150.
Scotia iTRADE
Finder Rating:
★★★★★
3.8 / 5
$4.99 - $9.99
$0
Bonds, Options, Mutual Funds, ETFs, GICs, International Equities
Interactive Brokers
Finder Rating:
★★★★★
4.1 / 5
Min. $1.00, Max. 0.5%
$0
Stocks, Bonds, Options, ETFs, Currencies, Futures
Questrade
Finder Rating:
★★★★★
4.2 / 5
$4.95 - $9.95
$0
Stocks, Bonds, Options, Mutual Funds, ETFs, GICs, International Equities, Precious Metals
Get $50 in free trades when you fund your account with a minimum of $1,000.
Qtrade Direct Investing
Finder Rating:
★★★★★
4.1 / 5
$6.95 - $8.75
$0 if conditions met, otherwise $25/quarter
Stocks, Bonds, Options, Mutual Funds, ETFs, GICs
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Compare up to 4 providers

Why should I invest in the S&P 500 index from Canada?

The S&P 500 features some of the largest and most successful companies in the world and has historically given investors a decent return on their investment.

Investing in the S&P 500 allows you to gain exposure to 500 different companies at once, which diversifies your portfolio. Diversification is important because if one stock in the index drops, your entire portfolio doesn’t necessarily drop too.

The stocks in the index are all large, household name companies, which opens you up to the potential gains offered by large U.S. stocks. However, since the index is comprised of entirely U.S. companies, your portfolio will take a hit if the U.S. economy (and likely the global economy) suffers.

The index itself aims to track the market, which makes it a convenient way to diversify your portfolio without having to buy and sell a number of individual stocks.

Disclaimer: This information should not be interpreted as an endorsement of futures, stocks, ETFs, CFDs, options or any specific provider, service or offering. It should not be relied upon as investment advice or construed as providing recommendations of any kind. Futures, stocks, ETFs and options trading involves substantial risk of loss and therefore are not appropriate for all investors. Trading CFDs and forex on leverage comes with a higher risk of losing money rapidly. Past performance is not an indication of future results. Consider your own circumstances, and obtain your own advice, before making any trades.

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