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How to invest in the S&P 500 in 2023

We've summed up how to invest in the S&P 500 along with some popular S&P 500 index funds and ETFs.

The S&P 500 is a a stock market index comprising 500 leading US companies. You can’t invest directly in the index but you can buy securities designed to mirror its performance or, if so inclined, buy the individual stocks of companies in the S&P 500.

At a glance

  • The S&P 500 is a stock market index composed of the stocks of 500 leading US companies.
  • Invest in the S&P 500 in two ways: Buy funds that mirror its composition or buy the individual stocks that comprise the index.
  • S&P 500 index funds provide a convenient, low-cost way to invest in the S&P 500.

2 ways to invest in the S&P 500

Invest in the S&P 500 in two ways: Buy ETFs or mutual funds that track the S&P 500 index or buy individual stocks that make up the S&P 500.

1. Buy an S&P 500 index fund

The easiest way to invest in the S&P 500 is to invest in either an ETF or mutual fund that tracks the S&P 500. Funds that track an index like the S&P 500 are known as index funds.

Index funds are designed to track the performance of and achieve approximately the same return as an underlying index — in this case, the S&P 500. S&P 500 index funds will at the least have exposure to the top constituents — Apple, Microsoft, Amazon, etc. These funds are a great way to add instant diversification to your portfolio at a low cost because a single share purchase gives you exposure to all the underlying stocks.

Since most S&P 500 index funds should, in theory, achieve nearly similar returns, a fund’s performance may not be the most important factor when deciding which to invest in. Investors may want to pay closer attention to expenses, which will likely vary the most between funds.

Best S&P 500 ETFs

IconFund5-year performanceLink to invest
Vanguard iconVanguard S&P 500 (VUSA)86.77%

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iShares iconiShares Core S&P 500 (CSP1)88.47%

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Invesco iconInvesco S&P 500 (SPXP)88.91%

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HSBC iconHSBC S&P 500 (HSPX)87.01%

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SPDR iconSPDR S&P 500 ETF (SPY)86.50%

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DWS Xtrackers iconXtrackers S&P 500 Equal Weight UCITS ETF (XDWE)69.22%

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2. Buy S&P 500 stocks individually

An alternative way of investing in the S&P 500 is to buy individual stocks in companies listed in the index. This is the more uneconomical way of investing in the S&P 500 and would mean buying and owning the individual stocks of the index.

A photo of Bob Haegele

What Bob says about simplify things with an ETF:

While DIY is a venerable approach when it comes to projects like home improvement, it's often unnecessary when investing. Picking and choosing individual stocks can get you better results in theory, but it's time-consuming and quite difficult to do consistently. On the other hand, ETFs can provide excellent results for the average investor, and the fees today are often quite low.

— Bob Haegele, Personal finance writer and expert

How to invest in the S&P 500 for beginners

  1. Choose a broker. Most brokers offer stocks and exchange-traded funds (ETFs) but also compare features, fees and other tradable assets. Consider these factors and the platform’s overall feel when choosing a broker.
  2. Open and fund an account. Complete an application with your personal details and link a bank account for funding.
  3. Research investment options. Find the stock, ETF or mutual fund by name or ticker symbol and research it before deciding if it’s a good investment for you.
  4. Place an order. Choose the number of shares or enter a dollar amount if the broker offers fractional share trading. Then, select an order type, whether that’s a market order or limit order or other order type.

Our top broker picks to invest in the S&P 500

Best all-in-one platform

Finder Award

SoFi Invest


  • Trade stocks for $0 and no annual fee
  • Start trading with a $0 minimum deposit
  • Get up to $1,000 in stock when you fund a new account within 30 days

Best for social investing

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eToro


  • Easy to use platform with $0 stock trading & no annual fees
  • Social trading allows you to copy popular portfolios
  • FINDER EXCLUSIVE: Guaranteed $15 bonus when you sign up and deposit $100

Best for options trading

tastytrade


  • $0 commissions on stocks and ETFs
  • $0 closing commissions on stock and ETF options
  • Get $100 - $2,000 when you open and fund an account with $5,000 to $100,000+

What is the S&P 500?

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) or Nasdaq.
The index was first introduced in 1957. Today, the S&P 500 covers approximately 80% of the available market cap and is widely regarded as the best single measure of US stock market performance.(1)

Though known officially as the S&P 500, the index actually contains 503 stocks as of August 2023. The index includes two share classes of stock from News Corp (NWS), Fox Corp (FOX) and Alphabet (GOOGL).(2)

What companies are in the S&P 500?

The S&P 500 includes some of the most recognizable and popular stocks in the world. The top ten constituents make up around 28% of the entire S&P 500, with Apple alone representing 7.5% of the total index.(3) This is why when Apple is down, the entire index feels it. The top 10 constituents of the S&P 500 by index weight as of August 2023 are:

ConstituentSector
Apple (AAPL)Information technology
Microsoft (MSFT)Information technology
Amazon.com (AMZN)Consumer discretionary
NVIDIA Corp (NVDA)Information Technology
Alphabet A (GOOGL)Consumer discretionary
Tesla Inc (TSLA)Consumer Discretionary
Meta Platforms Inc (META)Communication Services
Alphabet C (GOOG)Communication Services
Berkshire Hathaway B (BRK-B)Financials
UnitedHealth Group (UNH)Healthcare

Historical performance of the S&P 500

Compare more brokers to invest in the S&P 500

1 - 6 of 6
Name Product Ratings Available asset types Minimum deposit Signup bonus
SoFi Invest
Finder Rating: 4.6 / 5: ★★★★★

Finder Award
SoFi Invest
★★★★★
Stocks, Options, ETFs, Cryptocurrency
$0
Get up to $1,000 in stock
when you fund a new account within 30 days.
Winner of Finder’s Best Low-Cost Broker award.
eToro
Finder Rating: 4.2 / 5: ★★★★★

Finder Award
EXCLUSIVE
eToro
★★★★★
Stocks, Options, ETFs, Cryptocurrency
$0
FINDER EXCLUSIVE: Get a guaranteed $15 bonus
when you sign up and deposit $100
Winner of Finder’s Best Broker for Beginners award. Not available in NY, NV, MN, TN, and HI.
tastytrade
Finder Rating: 4.1 / 5: ★★★★★
tastytrade
★★★★★
Stocks, Options, ETFs, Cryptocurrency, Futures
$0
Get $100 - $2,000
when you you open and fund an account with $5,000 to $100,000+
Highly commended for Best Derivatives Trading Platform award.
Public.com
Finder Rating: 4 / 5: ★★★★★
Public.com
★★★★★
Stocks, ETFs, Cryptocurrency, Art, Treasury Bills, Collectibles
$0
Get up to $300 in either stocks or crypto
when you use code FINDERUS to sign up and fund a new account.
2.5% fee applies to all alternative asset transactions.
Robinhood
Finder Rating: 4.2 / 5: ★★★★★
Robinhood
★★★★★
Stocks, Options, ETFs, Cryptocurrency
$0
Get a free stock
when you successfully sign up and link your bank account.
Make unlimited commission-free trades, plus earn 4.9% interest on uninvested cash in your account with Robinhood Gold.
Wealthfront
Finder Rating: 4 / 5: ★★★★★
Wealthfront
★★★★★
Stocks, ETFs
$500
N/A
Wealthfront builds a free financial plan for the life you want and automate your investments at a low cost.
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Pros and cons of investing in the S&P 500

Pros

  • Exposure to America’s leading companies. Gain exposure to America’s most influential companies, including Apple, Microsoft, Amazon and Tesla, with a single purchase.
  • Instant diversification. Buying a single share of an S&P 500 index fund will give you exposure to the stocks of all its underlying companies, immediately diversifying your portfolio.
  • Competitive long-term performance. Over the past 25 years, the S&P 500 has produced total returns of 9% — or 6.8% when adjusted for inflation.(4)
  • Ease of investing. Buying shares of an S&P 500 index fund limits the time you need to spend researching and gets you in the market quicker.

Cons

  • It includes only US companies. The S&P 500 includes only stocks of US companies and excludes companies in other parts of the world.
  • It includes only large-cap companies. The S&P 500 includes only large-cap stocks, so you won’t gain any exposure to small-cap or mid-cap stocks, which tend to grow at faster rates than their large-cap counterparts.

Frequently asked questions about investing in the S&P 500

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