5 Best S&P 500 ETFs to buy for Q2 2023
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10/1077% of retail CFD accounts lose money.
The S&P 500 is a list of the largest companies in the United States. By investing in an ETF that tracks its performance, you can gain exposure to all of those companies very easily. Read on to find the best S&P 500 ETFs and get help on how to choose between them.
What are the top S&P 500 ETFs to buy?
The top ETFs can be found in the table below. Our experts have combed the markets to pick out the best options and you can start investing by clicking any of the links in the table. Otherwise, you can scroll down to find more information on each.
| # | ETF ticker | ETF name | Get started |
|---|---|---|---|
| 1 | VUSA | Vanguard S&P 500 UCITS ETF | Invest now 77% of retail CFD accounts lose money. |
| 2 | IVV | iShares Core S&P 500 ETF | Invest now 77% of retail CFD accounts lose money. |
| 3 | SPY | SPDR S&P 500 ETF | Invest now 77% of retail CFD accounts lose money. |
| 4 | NSPI | Nationwide S&P 500 Risk-Managed Income ETF | Invest now 77% of retail CFD accounts lose money. |
| 5 | SPLG | SPDR Portfolio S&P 500 ETF | Invest now 77% of retail CFD accounts lose money. |
1. Vanguard S&P 500 UCITS ETF (LON: VUSA)
Vanguard is one of the largest asset management funds in the world and its S&P 500 ETF has been operating since 2012. The fund owns all the stocks that are listed on the S&P 500 but weighted so that tech giants like Apple, Microsoft, and Amazon have the largest impact on its performance.
As the value of the S&P 500 index itself has grown dramatically over the past few years, so has the Vanguard fund. It has doubled in value over the past five years, despite a substantial drop in March 2020 when the pandemic hit.
Vanguard is a highly regarded asset manager and over the long term, the S&P 500 is likely to be one of the best methods of wealth-building available. This ETF offers a secure way for the average investor to take advantage of that fact.
2. iShares Core S&P 500 ETF (NYSEARCA: IVV)
iShares is the ETF arm of BlackRock, the largest asset manager in the world. Its S&P 500 ETF trades under the ticker IVV and operates in much the same way as the Vanguard fund; it owns 500 stocks, weighted so that it has the most exposure to Big Tech firms that dominate the index.
While the performance of all these ETFs is much the same, as they are all tracking the same list of stocks, there are a few areas of difference. The most notable of these is price, and it’s in that area that the iShares fund excels.
Each ETF charges an annual maintenance, or management, fee. iShares charges just 0.03% per year, which is less than half that of Vanguard and so makes it an excellent choice for any new investor.
3. SPDR S&P 500 ETF (NYSEARCA: SPY)
The SPDR ETF was the first ETF to be listed in the United States and remains the largest ETF in the world. It was first listed in 1993 and it has generated an average annual return of about 10% a year since then.
Technology makes up the largest portion of the fund, and combined with healthcare and financial companies accounts for about half of the money invested. That means that these sectors play a significant role in its performance.
One of the ways an ETF such as this generates long term results is by investing any dividends back into the fund. Reinvesting dividends in this way means that you can keep drip feeding more money into your investments and growing your overall wealth.
4. Nationwide S&P 500 Risk-Managed Income ETF (NYSEARCA: NSPI)
The Nationwide S&P 500 ETF is a fund with a twist because it offers extra protection against market falls. Like all the other funds on this list, it owns the 500 stocks that feature on the S&P 500, with at least a quarter of its holdings being from one particular industry: technology.
The difference is that the fund also protects itself against downside risk. It sells call options and buys put options on the S&P 500, generating premiums from the former and using that to pay the premiums on the latter.
The advantage of the options is that the fund can use them to guarantee a certain sale price for the stocks it owns in case the market falls. If the market continues to perform well then the fund earns extra money from the premiums.
5. SPDR Portfolio S&P 500 ETF (NYSEARCA: SPLG)
The second SPDR ETF on this list is perfect for investors with a long term focus. In almost all respects, it’s like the SPY fund covered above. However, it is designed to benefit those with a much more long term focus.
SPLG’s management fees are a third of those charged by SPY; 0.03% annually, compared to 0.09%. It also has far less money under management, which means that there’s less liquidity and it’s harder to buy and sell shares in the fund.
The trade offs for the lack of liquidity are the cheaper fees and an improved dividend yield. In all respects, this ETF benefits those who intend to leave their money in the fund. Over time, it is likely to (marginally) outperform the SPY fund, as long as you leave your money alone.
Where to buy the best S&P 500 ETFs
You can buy shares in any of the ETFs on this page by clicking the links below. These brokers all offer a quick and easy way to start investing and you can create an account in just a few minutes.
77% of retail CFD accounts lose money.
What is an S&P 500 ETF?
It’s an investment fund that lets you buy a piece of the S&P 500 index, a list of the 500 largest companies in America. By buying a share in an S&P 500 ETF, you can make an investment in a wide range of high performing stocks from different industries and benefit from the collective performance of all companies on the list.
An ETF, or exchange-traded fund, pools money together from lots of different investors and uses it to invest in a particular index, sector, or asset. It trades on the stock market itself, so you can buy and sell shares in the fund at any time. The fact it’s so easy to invest in an ETF and that it gives you access to a range of stocks makes it an excellent choice for beginners.
Are S&P 500 ETFs a good investment?
It is if you’re looking for a simple, inexpensive, and reliable way to invest in all the top US companies. It’s the best way to create a ‘set and forget’ investment strategy where you can put money in at regular intervals and build your wealth over a long period.
There are a couple of cautionary notes, however. You should beware of ETFs that are too heavily weighted towards the top companies, as this can reduce the benefits of diversification. An S&P 500 ETF also naturally misses out on some geographical diversification as well.
Despite that, these ETFs represent excellent investment opportunities. You can sign up to a broker and start buying shares in one through the link below, or find the latest stock market news at the bottom of the page.
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