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 36% of the entire S&P 500 with Microsoft alone representing over 6% of the total index. This is why when Microsoft is down, the entire index feels it. The top 10 constituents of the S&P 500 by index weight as of July 10, 2025 are:
| Company | Ticker | Weighting | Stock price | Market cap | Buy now on Moomoo |
|---|---|---|---|---|---|
 | 7.10% |
$164.92
|
$4 trillion
| ||
 | 6.62% |
$503.32
|
$3.7 trillion
| ||
 | 5.63% |
$211.16
|
$3.2 trillion
| ||
 | 4.21% |
$225.02
|
$2.4 trillion
| ||
 | 3.24% |
$717.51
|
$1.8 trillion
| ||
 | AVGO | 2.30% |
$274.38
|
$1.3 trillion
| |
 | 1.97% |
$180.19
|
$2.2 trillion
| ||
| GOOG-C | 1.87% |
$181.31
|
$2.2 trillion
| |
 | BRK-B | 1.83% |
$475.86
|
$1 trillion
| |
 | 1.78% | lml | lml |
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, preferred shares, convertible bonds, American Depositary Receipts (ADRs), ETFs, closed-end funds, investment trusts, limited partnerships (LPs), limited liability companies (LLCs) and special purpose acquisition companies (SPACs).
Closing prices are in USDYou 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—Apple, Microsoft, Amazon 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% |
 | SPDR Portfolio S&P 500 ETF | SPLG | ETF | 0.02% |
 | Vanguard S&P 500 ETF | VOO | ETF | 0.03% |
| Vanguard 500 Index Fund Admiral Shares | VFIAX | Mutual fund | 0.04% |
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 FAANG companies like Meta (Facebook), Apple, Amazon and so on.
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S&P 500 Market Update
Historically, over the past 10 years, the S&P 500 has seen an average annual growth rate of 11.81%. Since 2009, the index has been profitable every year except for 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 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.
Response | Male | Female |
|---|---|---|
| US | 53.04% | 45.36% |
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