The Customary & Poor’s 500 (S&P 500) is a US benchmark inventory index and has now turn out to be a logo of the complete inventory market. The S&P 500 has a robust report of common annual returns of round 10% over the long run, permitting traders to buy indexes through funds (ETFs) traded at change, and acquire quick publicity to all shares.
Under are some different funds based mostly on the S&P 500 ETF and the S&P 500 that traders ought to think about.
Finest S&P 500 ETF
The next funds are invested within the S&P 500 with the identical weighting because the official index. The S&P 500 is weighted by market capitalization, so massive corporations have a bigger index weight. The fund right here is attempting to intently replicate the efficiency of the official S&P 500. These funds are likely to have a decrease value ratio. That is the price paid to the fund administration firm.
The next funds are all index funds as they observe particular indexes and passively spend money on the fund administration, reflecting solely the index’s official modifications. It’s also possible to discover the most effective NASDAQ funds in case you are contemplating investing in high-tech stock.
((Funding information as of July 31, 2025)
Vanguard S&P 500 ETF (VOO)
This Vanguard Fund tracks the S&P 500 and is likely one of the firm’s hottest funds.
Annual income over 5 years: 16.1%
Price Ratio: 0.03%
iShares Core S&P 500 ETF (IVV)
The iShares S&P 500 fund is one other standard technique to spend money on benchmark indexes.
Annual income over 5 years: 16.1%
Price Ratio: 0.03%
SPDR S&P 500 ETF Belief (SPY)
The State Road Fund is the grandfather of US ETFs, and tracks the S&P 500 index, however at a barely increased value than rival funds.
Annual income over 5 years: 16%
Price Ratio: 0.095%
SPDR Portfolio S&P 500 ETF (SPLG)
This state road fund works precisely the identical because the sister fund above, however with essentially the most aggressive value ratio right here.
Annual income over 5 years: 16.1%
Price Ratio: 0.02%
Different funds to present a twist to the S&P 500
The above fund tracks a daily S&P 500 index, so its efficiency continues intently with that index. Nonetheless, the funds under are sliced and diceeded by slicing indexes in a special return set than the official S&P 500 index. Some funds embrace all of the shares within the index, however their weights fluctuate, whereas others carve out a few of their progress or worth shares and based mostly that fund on them.
Investco S&P 500 EqualWeightETF (RSP)
This Invesco Fund equally weights a whole bunch of shares within the S&P 500 (not market capitalization), so every share has a share of about 0.2% of the fund. This fund is healthier than the common S&P 500 fund when fewer shares outperform and bigger shares behind.
Annual income over 5 years: 13.5%
Price Ratio: 0.20%
iShares S&P 500 GrowthETF (IVW)
This ISHARES fund tracks a subset of the S&P 500, together with the quickest rising shares, as measured by elements corresponding to gross sales progress over the three years and inventory momentum.
Annual income over 5 years: 16.7%
Price Ratio: 0.18%
iShares S&P 500 Worth ETF (ive)
This iShares fund tracks a subset of the S&P 500 containing value-price shares as measured by elements corresponding to low-price-to-return ratio and price-to-sell ratio of shares.
Annual income over 5 years: 14.3%
Price Ratio: 0.18%
SPDR Portfolio S&P 500 Progress ETF (SPYG)
This State Road Fund owns shares between the quickest rising S&P 500 shares, as decided by inventory momentum, gross sales progress and income progress in comparison with worth modifications.
Annual income over 5 years: 16.8%
Price Ratio: 0.04%
SPDR Portfolio S&P 500 Worth ETF (SPYV)
This State Road Fund owns shares inside a subset of S&P 500 shares of worth worth, as decided by the inventory’s worth return charge, price-to-selling charge, and price-to-book ratio.
Annual income over 5 years: 14.4%
Price Ratio: 0.04%
Vanguard S&P 500 GrowthETF (voog)
This Vanguard Fund tracks a subset of the S&P 500. This contains value-price shares as decided by elements such because the low-price return charge of the inventory and the ratio of worth to sale.
Annual income over 5 years: 16.7%
Price Ratio: 0.07%
Dangers of the S&P 500 ETF
Whereas ETFs are an effective way to take a position available in the market, they nonetheless have some drawbacks.
- Volatility: ETFs are extremely unstable, however are usually much less unstable than particular person strains. Within the brief time period, ETFs can transfer up and down, and you will need to promise to carry them for years to benefit from the robust long-term returns of the fund.
- Monitoring threat: ETFs that observe a specific index might not totally replicate the return of the index and are known as monitoring threat. For these S&P 500 funds, that is not a giant threat, however different varieties of index funds can fluctuate extensively, particularly for those who’re investing in low-liquid shares.
- Structural value: ETFs that use leverage to multiply returns or attempt to make income on inventory declines have further prices that may be expensive. These further prices can drag in your potential to trace returns and goal indexes over time. This isn’t a problem for the S&P 500 funds talked about above, but it surely’s one thing you’d see for those who’re investing in leveraged ETFs.
Conclusion
The S&P 500 index fund is one of the simplest ways to take a position available in the market and doesn’t require a lot funding experience to take action. In actual fact, legendary investor Warren Buffett has lengthy suggested most traders to easily purchase indexes reasonably than spend money on particular person shares. Shopping for an S&P 500 fund could be very straightforward and you are able to do so with among the best brokers for inventory buying and selling.