Over the long term, it’s incredibly difficult to assemble a portfolio that outperforms the S&P 500, which has delivered average annual returns of about 10% over a nearly 90-year period. What’s more, buying an S&P 500 ETF, or exchange-traded fund, is an easy way for investors to buy a big slice of the market for a relatively small price.
And while most ETFs that track the S&P 500 are composed of the same investments, there are some differences you should know before making a selection between them.
What's the best S&P 500 ETF?
If you search for S&P 500 ETFs, you may come across dozens of funds. Just because S&P 500 is in a fund’s name doesn’t necessarily mean it tracks the index as a whole. Rather, many of these ETFs track sub-components, say value or growth stocks, within the broader index.
But you won’t have to wade through a ton of options to decide on an ETF that tracks the performance of the S&P 500 index as a whole. The following funds track the entirety of the index.
Source: VettaFi. Data is current as of June 1, 2023, and is for informational purposes only.
How to choose an S&P 500 ETF
The three S&P 500 ETFs are quite similar in two important aspects: You won’t have trouble finding these ETFs at most online brokers, and they’re very liquid, meaning it’s easy to buy and sell them on any given day.
We’re not here to pick a winner — the right fund for you is a personal decision — but there are some nuances you may want to consider:
Expense ratios. VOO and IVV boast the lowest management fee at 0.03%, about one-third of the SPY ETF. While the difference between a 0.03%, and 0.0945% expense ratio may seem trivial, such fees can really add up. For every $10,000 invested, these respective fees equal $3 and $9.45 annually. Then consider the difference at higher balances, such as $100,000.
Trading costs. Many of the best brokers for ETF investing offer hundreds of commission-free ETFs, but the specific fund list varies broker to broker. Fortunately, most major brokerages no longer charge commissions on ETF, stocks or options trades.
Price. There’s a slight difference in the price at which each fund currently trades. This shouldn’t necessarily be a deciding factor, but it may affect how many shares you can buy at any given time.
Yield and return. There are some slight differences across these funds even though they all track the same index. These differences generally relate to return and yield. These returns will change over time, and there's no guarantee that the ETF with the best return right now will have the best return in the future. That's why we look at the 5-year return, to see how each ETF performs over the long-term.
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You only need one S&P 500 ETF
For some people, digging into the details is half the fun of investing. For others, it’s all minutia. All three of the ETFs listed here have lower-than-average expense ratios and offer an easy way to buy a slice of the U.S. stock market.
You could be tempted to buy all three ETFs, but just one will do the trick. You won’t get any additional diversification benefits (meaning the mix of various assets) because all three funds track the same 500 companies. What’s more, you might tie up money that could be better invested elsewhere.
Learn more about sector ETFs:
What's next?
No matter which S&P 500 ETF you ultimately select, this fund should serve as a foundation in your portfolio. Not sure what to invest in next? Our guide on how to build a good investment portfolio offers some tips.
Neither the author nor editor held positions in the aforementioned investments at the time of publication.
FAQs
SPDR S&P 500 ETF (SPY)
The State Street SPDR S&P 500 ETF is not only the oldest U.S. listed exchange-traded fund, but it also typically has both the largest assets under management (AUM) and highest trading volume of all ETFs. This alone makes the SPY the mother of all S&P 500 ETFs.
What are the best ETFs to invest in 2023? ›
10 Best Growth ETFs of 2023
- Best Growth ETFs of June 2023.
- Vanguard Russell 1000 Growth ETF (VONG)
- Nuveen ESG Large-Cap Growth ETF (NULG)
- iShares Morningstar Mid-Cap Growth ETF (IMCG)
- Vanguard Mid-Cap Growth ETF (VOT)
- Vanguard S&P Small-Cap 600 Growth ETF (VIOG)
- iShares Morningstar Small-Cap Growth ETF (ISCG)
Which ETFs outperform the S&P 500? ›
The VanEck Morningstar Wide Moat ETF has been a consistent outperformer over the past 10 years
- SPX.
- SPY.
- AAPL.
- MSFT.
- AMZN.
- NVDA.
- GOOG.
- GOOGL.
What is the best-performing ETF in last 5 years? ›
100 Highest 5 Year ETF Returns
Symbol | Name | 5-Year Return |
---|
TAN | Invesco Solar ETF | 25.14% |
USD | ProShares Ultra Semiconductors | 24.91% |
ROM | ProShares Ultra Technology | 24.65% |
SMH | VanEck Semiconductor ETF | 23.12% |
91 more rows
What ETF mirrors the S&P 500? ›
SPDR S&P 500 ETF (SPY)
The State Street SPDR S&P 500 ETF is not only the oldest U.S. listed exchange-traded fund, but it also typically has both the largest assets under management (AUM) and highest trading volume of all ETFs. This alone makes the SPY the mother of all S&P 500 ETFs.
What are the top 5 sectors to invest in 2023? ›
5 Best Sectors for Long-term Investment in India 2023
- Information Technology (IT)
- FMCG (Fast-moving consumer goods)
- Housing finance companies.
- Automobile Companies.
- Infrastructure.
- Bonus: Pharmaceuticals Stocks.
What stocks could double in 2023? ›
7 Growth Stocks That Could Double Your Money in 2023
RAMP | LiveRamp | $24.68 |
---|
KYMR | Kymera Therapeutics | $28.35 |
SDGR | Schrodinger | $26.10 |
HSAI | Hesai Group | $8.10 |
ABCL | AbCellera Biologics | $5.74 |
2 more rowsMay 14, 2023
Does Warren Buffett outperform the S&P 500? ›
Berkshire has a history of outperforming the S&P 500 during recessions, and performing especially well during bear markets, according to data from Bespoke Investment Group. Since 1980, Berkshire shares have beat the broader market over the course of six recessions by a median of 4.41 percentage points.
What is the best Fidelity S&P 500 ETF? ›
Best S&P 500 index funds
- Fidelity ZERO Large Cap Index (FNILX) ...
- Vanguard S&P 500 ETF (VOO) ...
- SPDR S&P 500 ETF Trust (SPY) ...
- iShares Core S&P 500 ETF (IVV) ...
- Schwab S&P 500 Index Fund (SWPPX) ...
- Shelton NASDAQ-100 Index Direct (NASDX) ...
- Invesco QQQ Trust ETF (QQQ) ...
- Vanguard Russell 2000 ETF (VTWO)
What is the hottest ETF right now? ›
7 Best ETFs to Buy Now
ETF | YTD performance as of June 2 |
---|
Ark Innovation ETF (ARKK) | 33.2% |
Global X MSCI Greece ETF (GREK) | 28.8% |
Pimco Enhanced Short Maturity Active ETF (MINT) | 2.5% |
iShares Gold Trust (IAU) | 6.8% |
3 more rowsJun 5, 2023
One of those exchange-traded funds, believe it or not, is the most famous ETF of all, the SPDR S&P 500 ETF Trust (SPY). Launched on Jan. 22, 1993, SPY has risen 828.3% since its inception. The other is a close cousin, the SPDR S&P Midcap 400 ETF Trust (MDY), with a 1,131% gain since its launch in 1995.
What is the most stable ETF? ›
1. Vanguard Total Stock Market ETF (VTI VTI +0.1% ) Vanguard Total Stock Market ETF is the keystone ETF for a portfolio of the best ETFS to buy now.
Why not to invest in sp500 ETF? ›
Invest Across Asset Classes
Investing only in the S&P 500 limits your portfolio to stocks, which can be a risky decision during major market crashes. Holding bonds, cash, real estate, and other assets can help to limit your risk during these periods.
What is the largest S&P 500 ETF? ›
The largest S&P 500 ETF is the SPDR S&P 500 ETF Trust SPY with $405.13B in assets. In the last trailing year, the best-performing S&P 500 ETF was IVV at 6.15%. The most recent ETF launched in the S&P 500 space was the Direxion Daily S&P 500 Bear 1X Shares SPDN on 06/08/16.
How do I choose a S&P 500 index fund? ›
How to Choose an S&P 500 Index Fund
- Expense ratio. As index funds are passively managed, expense ratios, which represent the fees you pay for the upkeep of your fund, should be nominal. ...
- Minimum investment. ...
- Dividend yield. ...
- Inception date.
What 4 sectors to buy in 2023? ›
2023 US sector outlook
- Real estate.
- Materials.
- Industrials.
- Communication. services.
What sector will boom in 2023? ›
Exploring 2023's Hottest Sectors For Investment
- Healthcare. While the world is breathing a collective sigh of relief at COVID-19 drawing to a close, the importance of having a robust healthcare system is at the front of everybody's minds. ...
- Energy. ...
- Consumer Staples.
Which sectors will outperform in 2023? ›
Core bonds and equity sectors like health care, technology and industrials may outperform or provide investors with cover in 2023.
Which stock will explode in 2023? ›
3 Penny Stocks That Are Poised to Explode in 2023
ABEV | Ambev | $2.91 |
---|
NOK | Nokia | $4.03 |
EGY | Vaalco Energy's | $3.69 |
May 15, 2023
What stocks should I watch in May 2023? ›
The Dow Jones Industrial Average remains in rally mode into the second quarter of 2023, above its 50-day moving average and sharply off its mid-October lows. The best Dow Jones stocks to buy and watch in May 2023 are Apple (AAPL), Boeing (BA), Microsoft (MSFT), Salesforce (CRM) and Visa (V).
"In the first half of 2023, the S&P 500 is expected to re-test the lows of 2022, but a pivot from the Federal Reserve could drive an asset recovery later in the year, pushing the S&P 500 to 4,200 by year-end," the investment bank said in a research note.
What are the best S&P 500 months? ›
If we move our starting point to 1941, then July falls back and April remains the S&P 500's strongest month, with a 1.7% average gain, according to CNBC. Every other month in that period averages around 0.7%.
What is the best month to invest in the S&P 500? ›
The monthly historical returns of both the S&P 500 Index and the Dow Jones Industrial Average show that the best months for the stock market are November, December, and April. The months of October and January also performed well but not as well as the months of April, November, and December.
What indexes have outperformed the S&P 500? ›
US funds that have consistently beaten the S&P 500 index
Fund | Seven-year return | One-year return |
---|
JPM US Select Equity Plus | 205% | 34.1% |
BlackRock US Dynamic | 203% | 40.7% |
Janus Henderson US Growth | 200% | 33.7% |
S&P 500 Index return (sterling return) | 195% | 32.5% |
21 more rowsApr 28, 2021
What 4 stocks is Warren Buffett investing in? ›
Buffett's Biggest Holdings
Company (Ticker) | Sector | Rank |
---|
Apple (AAPL) | Information Technology | 1 |
Bank of America (BAC) | Finance | 2 |
Chevron (CVX) | Energy | 3 |
Cola-Cola (KO) | Consumer Staples | 4 |
6 more rowsMay 22, 2023
Do any mutual funds outperform the S&P 500? ›
From 2010 through 2021, anywhere from 55% to 87% of actively managed funds that invest in S&P 500 stocks couldn't beat that benchmark in any given year. Compared with that, the results for 2022 were cause for celebration: About 51% of large-cap stock funds failed to beat the S&P. 500.
Is it smart to invest everything in the S&P 500? ›
Legendary investor Warren Buffet once said that all it takes to make money as an investor is to 'consistently buy an S&P 500 low-cost index fund. ' And academic research tends to agree that the S&P 500 is a good investment in the long term, despite occasional drawdowns.
Is Vanguard or Fidelity better for ETFs? ›
Fidelity and Vanguard both do a good job keeping costs fairly low, but Fidelity has a slight edge overall. Both brokers charge zero commission for stock and ETF trades, but Fidelity charges $0.65 per contract on options trades, while Vanguard charges $1 per contract for customers with less than $1 million in assets.
Are Vanguard ETFs better than Fidelity? ›
Bottom Line. Overall, Vanguard and Fidelity are both great choices for those interested in investing. They offer a wide range of investment options, low costs, and hands-off or active management depending on your preference. When it comes to index funds, Vanguard is hard to beat, with hundreds of low-cost options.
What is the most aggressive Fidelity fund? ›
Most Aggressive
Asset Type | Fund Name | Allocation |
---|
Foreign Stock | Fidelity International Value Fund ( ) | 19.00% |
---|
Domestic Stock | Fidelity Blue Chip Value Fund ( ) | 11.00% |
Domestic Stock | Fidelity Growth Strategies Fund ( ) | 6.00% |
Domestic Stock | Fidelity Magellan Fund ( ) | 8.00% |
6 more rows
What Are the Best Vanguard ETFs?
- Vanguard Short-Term Inflation-Protected Securities ETF (VTIP)
- Vanguard S&P 500 ETF (VOO)
- Vanguard Real Estate ETF (VNQ)
- Vanguard Total Stock Market ETF (VTI)
- Vanguard Total International Stock ETF (VXUS)
- Vanguard Information Technology ETF (VGT)
- Vanguard Total Bond Market ETF (BND)
What is the #1 safest investment? ›
Treasury Bills, Notes and Bonds
U.S. Treasury securities are considered to be about the safest investments on earth. That's because they are backed by the full faith and credit of the U.S. government. Government bonds offer fixed terms and fixed interest rates.
What is the best type of ETF to buy now? ›
Best-performing large-cap ETFs
Symbol | Fund name | 5-year return |
---|
SMH | VanEck Semiconductor ETF | 23.12% |
XSD | SPDR S&P Semiconductor ETF | 22.64% |
TAN | Invesco Solar ETF | 22.30% |
SOXX | iShares Semiconductor ETF | 21.74% |
1 more rowJun 1, 2023
What is the most aggressive ETF? ›
Aggressive Growth ETF List
Symbol Symbol | ETF Name ETF Name | ESG Score Global Percentile (%) ESG Score Global Percentile (%) |
---|
VGT | Vanguard Information Technology ETF | 82.69% |
XLK | Technology Select Sector SPDR Fund | 88.82% |
IVW | iShares S&P 500 Growth ETF | 63.33% |
SCHG | Schwab U.S. Large-Cap Growth ETF | 58.77% |
4 more rows
What is the number one traded ETF? ›
Most Popular ETFs: Top 100 ETFs By Trading Volume
Symbol | Name | Avg Daily Share Volume (3mo) |
---|
SPY | SPDR S&P 500 ETF Trust | 88,958,266 |
SOXL | Direxion Daily Semiconductor Bull 3x Shares | 73,791,477 |
BOIL | ProShares Ultra Bloomberg Natural Gas | 67,376,516 |
UVXY | ProShares Ultra VIX Short-Term Futures ETF | 62,721,863 |
96 more rows
Which ETFs grew the most in the last three years? ›
100 Highest 3 Year ETF Returns
Symbol | Name | 3-Year Return |
---|
RSPG | Invesco S&P 500 Equal Weight Energy ETF | 30.66% |
OILK | ProShares K-1 Free Crude Oil Strategy ETF | 30.21% |
XME | SPDR S&P Metals & Mining ETF | 30.13% |
PSCE | Invesco S&P SmallCap Energy ETF | 30.10% |
90 more rows
Which ETF has lowest risk? ›
Short-term bond ETFs
This kind of bond ETF gives exposure to bonds with a short maturity, typically no more than a few years. These bond ETFs won't move much in response to changes to interest rates, meaning they're relatively low risk.
What is better than ETF? ›
Both can track indexes as well, however ETFs tend to be more cost effective and more liquid as they trade on exchanges like shares of stock. Mutual funds can provide some benefits such as active management and greater regulatory oversight, but only allow transactions once per day and tend to have higher costs.
How long should you hold an ETF? ›
Holding period:
If you hold ETF shares for one year or less, then gain is short-term capital gain. If you hold ETF shares for more than one year, then gain is long-term capital gain.
What is the S&P 500 prediction for 2023? ›
Analysts are forecasting full-year profit growth for 2023 of just 1.2%. At the same time, the S&P 500's forward 12-month price-to-earnings ratio is now at 19 compared with 17 at the end of 2022 and a long-term average of about 16, according to Refinitiv data.
You only need one S&P 500 ETF
You could be tempted to buy all three ETFs, but just one will do the trick. You won't get any additional diversification benefits (meaning the mix of various assets) because all three funds track the same 500 companies.
Should I just buy S&P 500 ETF? ›
Whether you're nervous about market volatility or simply want an investment you can count on to keep your money safe, an S&P 500 ETF or index fund is a fantastic choice. This type of investment tracks the S&P 500 itself, meaning it includes the same stocks as the index and aims to mirror its performance.
What is the largest ETF in 2023? ›
As of January 16, 2023, State Street's SPDR S&P 500 ETF Trust was the highest valued exchange traded fund (ETF) globally, with a market capitalization of over 365 billion U.S. dollars.
What is the S&P 500 Top 50 ETF fund? ›
Fund description
The Invesco S&P 500® Top 50 ETF (Fund) is based on the S&P 500® Top 50 Index (Index). The Fund will invest at least 90% of its total assets in securities that comprise the Index. The Index is composed of 50 of the largest companies in the S&P 500® Index. The Fund and the Index are rebalanced annually.
What is better S&P 500 Index Fund or ETF? ›
ETFs are more tax-efficient than index funds by nature, thanks to the way they're structured. When you sell an ETF, you're typically selling it to another investor who's buying it, and the cash is coming directly from them. Capital gains taxes on that sale are yours and yours alone to pay.
Do most investors beat the S&P 500? ›
The phrase "beating the market" means earning an investment return that exceeds the performance of the Standard & Poor's 500 index. Commonly called the S&P 500, it's one of the most popular benchmarks of the overall U.S. stock market performance. Everybody tries to beat it, but few succeed.
Which is better VTI or VOO? ›
VTI vs VOO: The Verdict
If you like the name-brand recognition of the S&P 500 and want to stick to large-caps, then VOO might be the better option. If you don't mind some mid and small-cap exposure, then VTI could be a good pick. Investors can potentially also use both as tax-loss harvesting pairs.
What percentage of portfolio should be S&P 500? ›
But the 5% rule can be broken if the investor is not aware of the fund's holdings. For example, a mutual fund investor can easily pass the 5% rule by investing in one of the best S&P 500 Index funds, because the total number of holdings is at least 500 stocks, each representing 1% or less of the fund's portfolio.
What stock will boom in 2023? ›
Bank of America's Best Growth Stocks of 2023
Company | Forward Sales Growth Next Year |
---|
Match (MTCH) | +11.6% |
Progressive (PGR) | +13.0% |
SolarEdge Technologies (SEDG) | +22.3% |
T-Mobile (TMUS) | +3.5% |
6 more rowsJun 1, 2023
What is the best potential stock for 2023? ›
10 of the Best Stocks to Buy for 2023
Stock | YTD Total Returns Through June 6 |
---|
Amazon.com Inc. (AMZN) | 50.7% |
Walt Disney Co. (DIS) | 6.1% |
PayPal Holdings Inc. (PYPL) | -8.7% |
EOG Resources Inc. (EOG) | -10.9% |
7 more rows6 days ago
The Famous Five of 2023
Sr No | Companies |
---|
1 | HDFC Bank |
2 | TCS |
3 | Hindustan Unilever |
4 | Infosys |
1 more row
Which fund is best 2023? ›
Top 10 most-popular funds in February 2023
Rank | Fund | IA sector |
---|
1 | Fundsmith Equity | Global |
2 | Vanguard LifeStrategy 80% Equity | Mixed investment 40%-85% shares |
3 | Vanguard LifeStrategy 100% Equity | Global |
4 | Vanguard US Equity Index | North America |
6 more rowsMar 1, 2023
What is the S&P performance in 2023? ›
The big picture: The S&P 500 is up 8.9% so far in 2023, or 9.7% including dividends. But the lion's share of that increase is due to the surging prices of a few of the largest companies.
What stock should I buy May 2023? ›
Best Value Stocks |
---|
| Price ($) | Market Cap ($B) |
---|
Chesapeake Energy Corp. (CHK) | 77.03 | 10.3 |
DISH Network Corp. (DISH) | 6.99 | 3.7 |
Ovintiv Inc. (OVV) | 32.94 | 8.1 |
2 more rowsMay 5, 2023
What markets will grow in 2023? ›
2023 US sector outlook
- Energy. Information. technology. Health care. Utilities.
- Real estate. Materials. Industrials. Communication. services.
- Consumer. staples. Consumer. discretionary. Financials.
What companies are growing in 2023? ›
From tech to ecommerce, this is our list of the fastest growing startups in 2023.
- Zerotier. 5-year search growth: 733% ...
- Cradlewise. 5-year search growth: 1328% ...
- OnlyFans. 5-year search growth: 9800% ...
- StackBlitz. 5-year search growth: 822% ...
- Linktree. 5-year search growth: 2150% ...
- Fandom. 5-year search growth: 295% ...
- Preply. ...
- Labster.
What stocks to buy for next 10 years? ›
5 Best Growth Stocks for the Next 10 Years
Growth stock | Year-to-date return (as of May 10 close) |
---|
Apple Inc. (ticker: AAPL) | 33.8% |
DexCom Inc. (DXCM) | 8.2% |
Fortinet Inc. (FTNT) | 37.1% |
Tesla Inc. (TSLA) | 36.8% |
1 more rowMay 11, 2023
What are the top stocks for June 2023? ›
VVV, AGL and VTNR are top stocks for EPS and revenue growth, respectively. Top growth stocks this month include Valvoline Inc., PPG Industries Inc., and Agilon Health Inc., all of which more than doubled their earnings in the most recent quarter.
Will stocks continue to rise in 2023? ›
Looking ahead to second-quarter reports, analysts are calling for S&P 500 earnings to fall 6.4% compared to a year ago. Fortunately, analysts are projecting S&P 500 earnings growth will rebound back into positive territory in the second half of 2023.
Which stock is best for long term? ›
best long term stocks
S.No. | Name | CMP Rs. |
---|
1. | SG Finserve | 571.20 |
2. | Ksolves India | 898.05 |
3. | Life Insurance | 597.05 |
4. | Knowledge Marine | 1166.80 |
23 more rows
Summary of the Best S&P 500 Index Funds of 2023
- Fidelity 500 Index Fund (FXAIX)
- Vanguard 500 Index Fund Admiral Shares (VFIAX)
- Schwab S&P 500 Index Fund (SWPPX)
Where to invest $25,000 in 2023? ›
What are the best types of investments of 2023?
- High Yield Savings Accounts. ...
- Short-Term Certificates of Deposits. ...
- Short-Term Government Bonds Funds. ...
- S&P 500 Index Funds. ...
- Dividend Stock Funds. ...
- Real Estate & REITs. ...
- Cryptocurrency.
What's the best ETF to buy right now? ›
7 Best ETFs to Buy Now
ETF | YTD performance as of June 2 |
---|
Ark Innovation ETF (ARKK) | 33.2% |
Global X MSCI Greece ETF (GREK) | 28.8% |
Pimco Enhanced Short Maturity Active ETF (MINT) | 2.5% |
iShares Gold Trust (IAU) | 6.8% |
3 more rowsJun 5, 2023