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.
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.
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.
| Icon | Fund | 5-year performance | 1-year performance (to June 2023) | Link to invest |
|---|---|---|---|---|
 | Vanguard S&P 500 (VUSA) | 86.77% | 8.75% | |
 | iShares Core S&P 500 (CSP1) | 88.47% | 8.80% | |
 | Invesco S&P 500 (SPXP) | 88.91% | 9.50% | |
 | HSBC S&P 500 (HSPX) | 87.01% | 9.09% | |
 | SPDR S&P 500 ETF (SPY) | 86.50% | 8.75% | |
 | Xtrackers S&P 500 Equal Weight UCITS ETF (XDWE) | 69.22% | 0.20% |
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.
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
Finder Award
SoFi Invest
Finder Award
eToro
tastytrade
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)
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:
| Constituent | Sector |
|---|---|
| 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 |
Paid non-client promotion. Finder does not invest money with providers on this page. If a brand is a referral partner, we're paid when you click or tap through to, open an account with or provide your contact information to the provider. Partnerships are not a recommendation for you to invest with any one company. Learn more about how we make money.
Finder is not an adviser or brokerage service. Information on this page is for educational purposes only and not a recommendation to invest with any one company, trade specific stocks or fund specific investments. All editorial opinions are our own.
Pros
Cons
Here’s what happens to your securities if your brokerage fails, and how your assets are protected by SIPC and FDIC.
Read more…
Several ETFs have exposure to Silicon Valley Bank, but it appears minimal.
Read more…
Treasury Bills are fixed-income assets with maturities of less than one year. Here’s what to know before investing.
Read more…Everything we know about the Discord IPO, plus information on how to buy in.
We’ve pulled a list together of the meme stocks being mentioned most on Reddit in the past 24 hours.
Steps to owning and managing TOTA, with 24-hour and historical pricing before you buy.
Steps to owning and managing TOT, with 24-hour and historical pricing before you buy.
Steps to owning and managing THBR, with 24-hour and historical pricing before you buy.
Steps to owning and managing SBE, with 24-hour and historical pricing before you buy.
Steps to owning and managing TEF, with 24-hour and historical pricing before you buy.
Steps to owning and managing PSACU, with 24-hour and historical pricing before you buy.
Steps to owning and managing DNK, with 24-hour and historical pricing before you buy.
Steps to owning and managing IPHA, with 24-hour and historical pricing before you buy.
