How many funds are in the S&P 500?
The S&P 500 is a stock market index maintained by S&P Dow Jones Indices. It comprises 503 common stocks which are issued by 500 large-cap companies traded on American stock exchanges (including the 30 companies that compose the Dow Jones Industrial Average).
The S&P 500 consists of 500 companies that have issued a total of 503 stocks.
An S&P 500 index fund is a fund that tracks the S&P 500 — a market index that measures the performance of about 500 U.S. companies. Index funds by definition aim to mirror a particular market index, whether that is the Dow Jones Industrial Average, the Nasdaq Composite Index or the S&P 500.
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.
Ticker | Fund Name | Issuer |
---|---|---|
SPY | SPDR S&P 500 ETF Trust | State Street Global Advisors |
IVV | iShares Core S&P 500 ETF | Blackrock |
VOO | Vanguard 500 Index Fund | Vanguard |
SPLG | SPDR Portfolio S&P 500 ETF | State Street Global Advisors |
However, the surge in investor interest in 'Mag 7' members Alphabet (GOOGL; GOOG), Amazon (AMZN), Apple (AAPL), Meta Platforms (META), Microsoft (MSFT), Nvidia (NVDA), and Tesla (TSLA) is not without risk. "The Mag 7's rise has left the S&P 500 at around its most concentrated in at least the last 100 years.
Fund (ticker) | 5-year annual returns | Expense ratio |
---|---|---|
Fidelity ZERO Large Cap Index (FNILX) | 14.6% | 0% |
Vanguard S&P 500 ETF (VOO) | 14.5% | 0.03% |
SPDR S&P 500 ETF Trust (SPY) | 14.5% | 0.095% |
iShares Core S&P 500 ETF (IVV) | 14.5% | 0.03% |
FUND | TICKER | TOTAL ASSETS |
---|---|---|
Fidelity 500 Index Fund | FXAIX | $534 billion |
Vanguard 500 Index Fund Admiral Shares | VFIAX | $1.1 trillion |
Schwab S&P 500 Index Fund | SWPPX | $91.4 billion |
State Street S&P 500 Index Fund Class N | SVSPX | $1.5 billion |
- Expense Ratio: 0.015%
- 2022 Return: -18.13%
- Yield: 1.33%
- Assets Under Management (AUM): $373.8 billion.
- Minimum Investment: $0.
- Inception Date: Feb. 17, 1988 (Share Class Inception Date: May 4, 2011)
- Issuing Company: Fidelity23.
Is it wise to only invest in S&P 500?
Meanwhile, if you only invest in S&P 500 ETFs, you won't beat the broad market. Rather, you can expect your portfolio's performance to be in line with that of the broad market. But that's not necessarily a bad thing. See, over the past 50 years, the S&P 500 has delivered an average annual 10% return.
Investing legend Warren Buffett has said that the average investor need only invest in a broad stock market index to be properly diversified. However, you can easily customize your fund mix if you want additional exposure to specific markets in your portfolio.
Choosing your investments
Investing in an S&P 500 fund can instantly diversify your portfolio and is generally considered less risky. S&P 500 index funds or ETFs will track the performance of the S&P 500, which means when the S&P 500 does well, your investment will, too. (The opposite is also true, of course.)
The historical average yearly return of the S&P 500 is 12.68% over the last 10 years, as of the end of February 2024. This assumes dividends are reinvested. Adjusted for inflation, the 10-year average stock market return (including dividends) is 9.56%.
- SPDR S&P 500 ETF Trust (SPY).
- iShares Core S&P 500 ETF (IVV).
- Vanguard S&P 500 ETF (VOO).
- SPDR Portfolio S&P 500 ETF (SPLG).
- Invesco S&P 500 Equal Weight ETF (RSP).
The S&P 500's track record is impressive, but the Vanguard Growth ETF has outperformed it. The Vanguard Growth ETF leans heavily toward tech businesses that exhibit faster revenue and earnings gains. No matter what investments you choose, it's always smart to keep a long-term mindset.
Berkshire owns shares in two prominent S&P 500 funds, but they're far from the only ones on the market. Each one you come across will give you roughly the same exposure and roughly the same returns. The major differentiator is cost. Take the two funds in Buffett's portfolio.
Vanguard set out in 1975 under a radical ownership structure that remains unique in the asset management industry. Our company is owned by its member funds, which in turn are owned by fund shareholders. With no outside owners to satisfy, we focus squarely on meeting the investment needs of our clients.
In 2020, Buffett said that “for most people, the best thing to do is to own the S&P 500 index fund, adding “People will try to sell you other things because there's more money in it for them if they do.” This no-frills investment strategy is one of the best for ensuring long-term, low-cost gains.
The Magnificent Seven stocks are a group of high-performing and influential companies in the U.S. stock market: Alphabet, Amazon, Apple, Meta Platforms, Microsoft, NVIDIA, and Tesla. Bank of America analyst Michael Hartnett used the film name in 2023 when commenting on these seven firms.
What stocks outperform the S&P 500?
The "Magnificent Seven" -- Apple (NASDAQ: AAPL), Microsoft (NASDAQ: MSFT), Amazon (NASDAQ: AMZN), Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL), Nvidia (NASDAQ: NVDA), Meta Platforms (NASDAQ: META) and Tesla (NASDAQ: TSLA) -- have produced market-trouncing returns in 2023.
Company | Symbol | Market Cap Weighting (%)* |
---|---|---|
Microsoft | (MSFT) | 10 |
Apple | (AAPL) | 8.2 |
Nvidia | (NVDA) | 6.9 |
Alphabet Class C | (GOOG) | 6.2 |
Key Takeaways. The S&P 500 index tracks some of the largest stocks in the United States, many of which pay out a regular dividend. The index's dividend yield is the total dividends earned in a year divided by the index's price. Historical dividend yields for the S&P 500 have typically ranged from between 3% to 5%.
- Fidelity Series Large Cap Growth Index Fund (FHOFX) ...
- Fidelity Large Cap Growth Index Fund (FSPGX) ...
- Schwab U.S. Large-Cap Growth Index Fund (SWLGX) ...
- Fidelity U.S. Sustainability Index Fund (FITLX) ...
- Fidelity 500 Index Fund (FXAIX) ...
- Schwab S&P 500 Index Fund (SWPPX)
Artemis Income, Liontrust UK Growth and iShares Corporate Bond Index are the latest funds to become the most recommended by best-buy lists in 2024.
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