Billionaire investor Warren Buffett has said “For most people, the best thing to do is to own the S&P 500 index.” So, what is the S&P 500 and how do you invest?
The S&P 500 is a market capitalization-weighted stock market index of 500 leading US companies in the most prominent industries of the US economy, traded on either the New York Stock Exchange (NYSE), Nasdaq or Cboe.
The index was first introduced in 1957. Today, the S&P 500 covers approximately 90% of available market cap and is widely regarded as the best single measure of US stock market performance.
The S&P 500 includes some of the most recognizable and popular stocks in the world. The top ten constituents make up over 37% of the entire S&P 500, with Nvidia alone representing more than 7% of the total index. This is why, when Nvidia is down, the entire index feels it. The top constituents of the S&P 500 by index weight are:
| Company | Ticker | Current weighting | Stock price | Market cap | Buy on Questrade |
|---|---|---|---|---|---|
 |
7.58% |
$186.64 | $4.9 trillion (USD) | Buy now | |
 |
7.16% |
$342.37 | $5 trillion (USD) | Buy now | |
 |
4.40% |
$530.61 | $3.9 trillion (USD) | Buy now | |
 |
3.73% |
$259.30 | $2.6 trillion (USD) | Buy now | |
 |
3.25% |
$284.78 | $3.5 trillion (USD) | Buy now | |
 |
AVGO |
2.93% |
$325.48 | $1.4 trillion (USD) | Buy now |
 |
2.60% |
$278.22 | $3.5 trillion (USD) | Buy now | |
 |
2.14% |
$614.99 | $1.6 trillion (USD) | Buy now | |
 |
1.77% |
$358.22 | $1.4 trillion (USD) | Buy now | |
 |
MU |
1.72% |
$690.00 | $943.1 billion (USD) | Buy now |
The companies in the S&P 500 are hand-picked by the Index Committee. Contrary to popular belief, it’s not just the 500 biggest US stocks. Eligible companies must:
Ineligible companies and share types include OTC Market (“pink sheets”) stocks, ETFs, preferred shares, convertible bonds, American Depositary Receipts (ADRs), closed-end funds, investment trusts, limited partnerships (LPs), limited liability companies (LLCs) and special purpose acquisition companies (SPACs).
Closing prices are in USD
"The most effective way to invest in the S&P 500 is through a cost-effective passive index fund. Options like the Vanguard S&P 500 ETF (VOO) and SPDR S&P 500 ETF Trust (SPY) are popular options for exposure to the index and offer relatively low expense ratios, which help to ensure that you’ll see more returns as the S&P 500 grows.
One of the best reasons to invest in the S&P 500 is that the index offers instant diversification as opposed to picking a handful of stocks to build your portfolio. As an index that tracks the performance of the 500 best-performing companies in the United States, adding exposure in your portfolio means that you’re supported by the very best of US businesses."
You can’t invest directly in the S&P 500, as it’s just an index that tracks stock performance. It’s not a fund that holds stocks for investors. But there are a couple of ways you can invest in S&P 500 companies.
The easiest way to invest in the S&P 500 is to invest in either an exchange-traded fund (ETF) or mutual fund that consists of stocks listed in the S&P 500. Funds that track an index like the S&P 500 are known as index funds.
S&P 500 index funds offer exposure to the index’s top constituents—Nvidia, Apple, Microsoft etc.—and provide a great, low-cost way to diversify your portfolio. Since most funds should (in theory) achieve similar returns, performance may not be the most important factor when deciding where to invest. Pay close attention to expenses, which vary between funds.
| Fund | Ticker | Type | Expense ratio | |
|---|---|---|---|---|
 | Fidelity 500 Index Fund | FXAIX | Mutual fund | 0.015% |
 | Schwab S&P 500 Index Fund | SWPPX | Mutual fund | 0.02% |
 | iShares Core S&P 500 ETF | IVV | ETF | 0.03% |
 | State Street SPDR Portfolio S&P 500 ETF | SPLG | ETF | 0.02% |
 | Vanguard S&P 500 ETF | VOO | ETF | 0.03% |
| Vanguard S&P 500 Index ETF | VFV | ETF | 0.09% |
An alternative way of investing in the S&P 500 is to buy individual stocks in companies listed in the index. This would mean buying and owning individual shares of the Magnificent Seven or FAANG companies like Meta (Facebook), Apple, Amazon and so on.
How to buy stocks online
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S&P 500 news and updates
Historically, over the past 10 years, the S&P 500 has seen an average annual growth rate of 13.74%. Since 2009, the index has been profitable every year except for 2011, 2015, 2018 and 2022.
However, with inflation, interest rates and economic instability concerning investors, the S&P 500 will mimic what the overall market is doing. Remember that the S&P 500 tracks large cap US companies, so if the overall US (and global) economy is down, indices that track the market will be as well.
Economic dips are temporary, and S&P 500 ETFs are focused on the long game. So far, the index has bounced back from every crash, bear market and recession in history. While no investments are immune to market downturns, many experts view the S&P 500 ETFs as likely to eventually bounce back.
Keep in mind that the stocks in the index are all large, household name companies, which opens you up to the potential gains offered by large US stocks. However, since the index is comprised of entirely US companies, your portfolio will take a hit if the US economy (and likely the global economy) suffers.
"The S&P 500 is not without risk and increasingly so as it has become more concentrated on the companies with the highest market capitalization. Seven companies (what are commonly called the “Mag 7”) account for around 35% of the index—a staggering portion. That means the average contribution of these seven stocks is 38x larger than the average contribution of the other 493. That is hugely disproportionate.
And these are mostly technology stocks like Apple, Microsoft, and Nvidia. So, if that sector stumbles or any of these highly weighted stocks fall, the entire index can underperform. It’s really dangerous because it’s essentially undoing, to a degree, the diversification protection it used to offer more of."
In the Finder: Consumer Sentiment Survey March 2026, we asked Canadians which financial issues occupy their minds the most. Growing investments has become less of a concern to Canadians, falling from the second-highest position in 2025 (35%) to the fifth-highest position in 2026 (22%).
This year, the top-rated answer was affording everyday expenses (39%), followed by managing debt (32%) and increasing income (31%). Last year, cost of living was also the highest concern (43%), according to the Finder: Consumer Sentiment Survey January 2025, followed by investment growth (35%) and making more money (31%).
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