Best S&P 500 ETFs To Buy In 2023

Introduction

The best approach to invest in the world’s top performing firms is with an ETF that tracks the S&P 500. This guide selects the top products available and contrasts where to buy them. The largest American corporations are listed on the S&P 500 index. You may easily obtain exposure to all of those companies by purchasing an ETF that monitors its performance. Discover the top S&P 500 ETFs and learn how to pick amongst them by reading on.

What Are The Top S&P 500 ETFs To Buy?

The following table lists the top ETFs. To find the best options, our experts searched the markets. Scroll down to learn more about each by clicking on the links.

1. Vanguard S&P 500 UCITS ETF (LON: VUSA)

The S&P 500 ETF from Vanguard, one of the leading asset management companies in the world, has been in operation since 2012. The fund owns every stock that is included in the S&P 500 index, but it is weighted so that the performance of tech behemoths like Apple, Microsoft, and Amazon is most heavily influenced.

The Vanguard fund has increased significantly over the previous few years, mirroring the growth of the S&P 500 index itself. Despite a large decline in value when the epidemic struck in March 2020, it has increased in value over the past five years.

The S&P 500 is probably one of the best ways to generate wealth over the long run, and Vanguard is a reputable asset manager. The common investor can benefit from that fact in a safe manner with the help of this ETF.

2. iShares Core S&P 500 ETF (NYSEARCA: IVV)

BlackRock, the biggest asset manager in the world, has an ETF division called iShares. Its S&P 500 ETF, which trades under the symbol IVV, functions very similarly to the Vanguard fund; it holds 500 equities and is weighted to provide it the greatest exposure to the Big Tech companies that make up the majority of the index.

As they all track the same list of equities, the performance of these ETFs is largely similar, although there are some notable differences. The most significant of these is pricing, and the iShares fund shines in this area.

A yearly management or maintenance fee is charged for each ETF. With annual fees of just 0.03%—less than half those of Vanguard—iShares is a fantastic option for novice investors.

3. SPDR S&P 500 ETF (NYSEARCA: SPY)

The SPDR ETF, which continues to be the biggest ETF in the world, was the first ETF to be listed in the United States. Since its first listing in 1993, it has produced a roughly 10% yearly return on average.

The fund’s major component, along with the healthcare and financial sectors, contributes for nearly half of the total amount invested. This indicates that these industries have a big impact on how well it performs.

The reinvestment of dividends into the ETF is one method by which it produces long-term effects. By using this method of reinvesting earnings, you can gradually add more money to your investments, increasing your overall worth.

4. Nationwide S&P 500 Risk-Managed Income ETF (NYSEARCA: NSPI)

A fund with a twist, the Nationwide S&P 500 ETF provides additional protection against market declines. It owns the 500 equities that make up the S&P 500, just like every other fund on this list, with at least 25% of its assets coming from one specific sector: technology.

The difference is that the fund also offers downside risk protection. On the S&P 500, it sells call options and purchases put options, utilising the premiums from the former to pay the premiums on the latter.

The benefit of the options is that, in the event that the market declines, the fund can utilise them to ensure a specific sale price for the equities it owns. The fund gets more money from the premiums if the market keeps doing well.

5. SPDR Portfolio S&P 500 ETF (NYSEARCA: SPLG)

For investors who have a long-term perspective, the second SPDR ETF on this list is ideal. It is virtually identical to the SPY fund discussed above. It is geared towards folks with a much longer-term perspective, though.

The management expenses for SPLG are only 0.03% yearly, compared to 0.09% for SPY. Also, because there is significantly less money under management, there is less liquidity and it is more difficult to acquire and sell shares of the fund.

The better dividend yield and lower fees are the trade-offs for the lack of liquidity. This ETF is advantageous for investors who want to leave their money in the fund in every way. If you leave your money alone, it will probably (slightly) beat the SPY fund in the long run.

What Is An S&P 500 ETF?

It is an investment fund that enables you to purchase a portion of the S&P 500 index, which is a ranking of the 500 biggest American corporations. You can invest in a variety of high-performing firms from various industries and gain from the combined performance of all the companies on the list by purchasing a share in an S&P 500 ETF.

An exchange-traded fund, or ETF, invests in a specific index, industry, or asset by pooling money from many different participants. You can buy and sell shares in the fund at any moment because it trades on the stock market itself. An ETF is a great option for novices because it’s so simple to invest in and gives you access to a variety of stocks.

Are S&P 500 ETFs A Good Investment?

If you want an easy, affordable, and trustworthy way to invest in all the leading US corporations, it is. It’s the greatest method to develop a “set and forget” investment strategy that allows you to make regular contributions and accumulate wealth over time.

But, there are a few warnings to be aware of. The advantages of diversification may be diminished by ETFs that have an excessive weighting towards the best-performing firms. Naturally, some geographic variety is also lost by an S&P 500 ETF.

In spite of this, many ETFs offer fantastic investing opportunities. Via the link below, you may open an account with a broker and begin purchasing shares in one. You can also get the most recent stock market news at the bottom of the page.

Conclusion

The S&P 500 is one of the most popular indices for tracking the performance of large-cap stocks in the United States. Investing in ETFs that track the S&P 500 can provide investors with exposure to a broad range of companies and diversify their portfolios. While there are many options to choose from, some of the best S&P 500 ETFs to consider for 2023 include SPDR S&P 500 ETF Trust, iShares Core S&P 500 ETF, and Vanguard S&P 500 ETF. Ultimately, investors should do their own research and consult with a financial advisor before making any investment decisions.

FAQ

What is an ETF and how does it track the S&P 500 index?

An ETF is an exchange-traded fund that tracks the performance of an underlying asset, such as the S&P 500 index. The ETF holds a portfolio of stocks that mirrors the index, and investors can buy or sell shares of the ETF on an exchange.

What are some factors to consider when choosing an S&P 500 ETF?

Some factors to consider when choosing an S&P 500 ETF include the expense ratio, trading volume, tracking error, and the fund’s historical performance.

What are the benefits of investing in S&P 500 ETFs?

Some benefits of investing in S&P 500 ETFs include diversification, low costs, and ease of trading. Additionally, they provide exposure to a broad range of large-cap stocks in the United States.

Can S&P 500 ETFs provide dividend income?

Yes, many S&P 500 ETFs provide dividend income to investors. The amount of dividend income varies depending on the specific ETF and the dividend yield of the underlying stocks.

Are S&P 500 ETFs a good investment for long-term growth?

Yes, S&P 500 ETFs can be a good investment for long-term growth as they provide exposure to a broad range of large-cap stocks in the United States. Over the long term, the S&P 500 index has historically provided solid returns for investors. However, past performance is not a guarantee of future results, and investors should always do their own research before making investment decisions.

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