Top S&P 500 ETF (2024)

FAQs

Which is the best S&P 500 ETF? ›

SPY, VOO and IVV are among the most popular S&P 500 ETFs. These three S&P 500 ETFs are quite similar, but may sometimes diverge in terms of costs or daily returns.

The Vanguard S&P 500 ETF (VOO 0.87%) is one of the best ways to invest in the S&P 500, which has been a pretty smart strategy over the long term. Since 1965, the S&P 500 has produced a total return of 10.2% annualized. The Vanguard ETF has an expense ratio of just 0.03%, so you get to keep most of your gains.

Vanguard S&P offers a lower expense ratio (0.035%) than SPY (0.095%), which means lower costs for investors and potentially higher net returns over the long term. VOO might be the more economical choice for cost-conscious investors, especially those investing large sums or planning for long-term goals like retirement.

VOO has a consensus rating of Moderate Buy which is based on 406 buy ratings, 91 hold ratings and 7 sell ratings. What is VOO's price target? The average price target for VOO is $544.87. This is based on 504 Wall Streets Analysts 12-month price targets, issued in the past 3 months.

You can't beat the Vanguard S&P 500 ETF's low cost

Though they are all extremely similar (as they are designed to track the same index), I prefer the Vanguard S&P 500 ETF mainly because of its low cost. It has a 0.03% expense ratio, which works out to total annual fees of $0.30 per $1,000 invested.

Assuming an average annual return rate of about 10% (a typical historical average), a $10,000 investment in the S&P 500 could potentially grow to approximately $25,937 over 10 years.

What index fund has a 10% return? ›

But over time indexes have made solid returns, such as the S&P 500's long-term record of about 10 percent annually. That doesn't mean index funds make money every year, but over long periods of time that's been the average return.

The S&P 500 is an index that tracks the 500 leading companies by market capitalization in the U.S. While you can't directly invest in the index itself, there are two broad options for investing in the S&P 500: through individual stocks or through an index fund, such as a mutual fund or exchange-traded fund (ETF).

For instance, some ETFs may come with fees, others might stray from the value of the underlying asset, ETFs are not always optimized for taxes, and of course — like any investment — ETFs also come with risk.

In 1980, had you invested a mere $1,000 in what went on to become the top-performing stock of S&P 500 (^GSPC 0.80%), then you would be sitting on a cool $1.2 million today. That equates to a total return of 120,936%. The stock? None other than Gap (GPS 28.60%).

S&P tech stocks beaten the index over the past decade

The Technology Select Sector SPDR Fund gives investors exposure to the tech stocks that are part of the S&P 500. This includes the heavy hitters, such as Microsoft, Apple, Nvidia, as well as many others.

Regarding risk, VOOG is generally considered riskier since you are investing in growth companies with higher volatility. However, these growth companies are in the S&P 500, eliminating some risk levels. Another key difference is expenses; VOO has a significantly lower expense ratio and is more diversified than VOOG.

The easiest and most efficient way to invest in the S&P 500 is via a low-cost exchange-traded fund (ETF). Several ETFs track the S&P 500, but the oldest and most popular is the SPDR S&P 500 ETF Trust (SPY). SPY was the first ETF to hit the US market in January 1993 and is now the world's most heavily traded ETF.