Investing in S&P 500 ETFs

A fund that invests in the companies in the S&P 500 can be a great way to start a portfolio and invest for the long term.

By Matthew Frankel, CFP – Updated Jun 16, 2025 at 11:47 PM | Fact-checked by Frank Bass

Key Points

S&P 500 ETFs simplify investing by tracking top US companies with minimal fees.
Investing in diverse S&P 500 ETFs offers broad market exposure, reducing reliance on select stocks.
ProShares offers an ETF to hedge or profit from declines by inversely tracking the S&P 500.

It's a common misconception that you need to buy individual stocks to create wealth in the stock market. While it's certainly possible to achieve excellent returns by doing so, you might be surprised at how well the stock market has performed over time.

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S&P 500 listed repeatedly. — Image source: Getty Images.

Over periods of decades, the benchmark S&P 500 -- which is widely considered to be the best indicator of the overall stock market -- has delivered annualized total returns of about 10%. A return rate like this, sustained over a long period, can help you create a surprising amount of wealth.

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Exchange-Traded Fund (ETF)

An exchange-traded fund, or ETF, allows investors to buy many stocks or bonds at once.

That's where an S&P 500 ETF can be handy. There are several great ETFs that allow you to track the performance of this benchmark index with a bare minimum of expense.

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Data as of June 3, 2025. Data sources: State Street Global Advisors SPDR, iShares, Vanguard, and ProShares.
ETF Name	Annual Fees (Expense Ratio)	Assets Under Management	Description
SPDR S&P 500 ETF Trust (NYSEMKT:SPY)	0.0945%	$603 billion	The first S&P 500 ETF in the U.S.
iShares Core S&P 500 ETF (NYSEMKT:IVV)	0.03%	$585 billion	An S&P 500 ETF managed by one of the largest asset managers around.
Vanguard S&P 500 ETF (NYSEMKT:VOO)	0.03%	$608 billion	Low-cost S&P 500 ETF option from a pioneer in the retail investing industry.
ProShares Short S&P500 (NYSEMKT:SH)	0.89%	$1.25 billion	A fund designed to profit from betting against the S&P 500.
Invesco S&P 500 Equal Weight ETF (NYSEMKT:RSP)	0.20%	$71.5 billion	An ETF that provides equal exposure to all 500 components of the index.

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NYSEMKT: SPY

SPDR S&P 500 ETF Trust

Today's Change

(0.08%) $0.51

Current Price

$671.81

Key Data Points

Market Cap

$0B

Day's Range

$669.99 - $672.99

52wk Range

$481.80 - $673.95

Volume

6.1M

Avg Vol

Gross Margin

0.00%

Dividend Yield

N/A

The SPDR S&P 500 ETF from State Street Global Advisors was the first ETF to be listed in the U.S. The fund has been available since 1993. Paired with the S&P 500 index's popularity, this has made the SPDR S&P 500 ETF one of the largest exchange-traded fund products around, with $603 billion in investor funds under management as of mid-2025.

The SPDR S&P 500 ETF tracks the performance of the S&P 500 index, less the annual fee, and distributes dividends paid by the companies in the index. The ETF charges 0.0945% per year in annual fees. For every $1,000 invested, that works out to just under $0.95 per year subtracted from the fund's performance.

2. iShares Core S&P 500 ETF

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NYSEMKT: IVV

iShares Trust - iShares Core S&P 500 ETF

Today's Change

(-0.02%) $-0.16

Current Price

$674.43

Key Data Points

Market Cap

$0B

Day's Range

$673.27 - $676.27

52wk Range

$484.00 - $677.20

Volume

10M

Avg Vol

Gross Margin

0.00%

Dividend Yield

N/A

The iShares Core S&P 500 ETF is another long-tenured U.S. ETF that invests in the stocks of the S&P 500 index. It offers an almost identical investing product to the SPDR offering, except that iShares' annual fee is even lower at just 0.03% per year.

The fund was launched in 2000 and had $585 billion in assets under management as of mid-2025. iShares is the ETF division of massive investment manager BlackRock (BLK -2.59%), which collectively manages more than $11.5 trillion in global assets.

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Assets Under Management (AUM)

The total market value of the financial assets an entity or advisor manages for their clients.

3. Vanguard S&P 500 ETF

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NYSEMKT: VOO

Vanguard S&P 500 ETF

Today's Change

(-0.01%) $-0.08

Current Price

$617.09

Key Data Points

Market Cap

$0B

Day's Range

$615.98 - $618.74

52wk Range

$442.80 - $619.60

Volume

4.2M

Avg Vol

Gross Margin

0.00%

Dividend Yield

N/A

Like the previous two ETFs, the Vanguard S&P 500 ETF is a simple way to invest in the companies of the S&P 500 index. It also charges just 0.03% annually. The ETF version of this Vanguard fund has $608 billion in assets under management as of June 2025. The company also offers a mutual fund that tracks the S&P 500, and both types combine for a total of $1.3 trillion of investor assets.

Vanguard’s founder, Jack Bogle, invented the passive index fund in the 1970s, which helped revolutionize access to investments for everyday retail investors.

4. ProShares Short S&P500

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NYSEMKT: SH

ProShares Trust - ProShares Short S&p500

Today's Change

(0.03%) $0.01

Current Price

$36.78

Key Data Points

Market Cap

$0B

Day's Range

$36.69 - $36.85

52wk Range

$36.59 - $51.37

Volume

4.6M

Avg Vol

Gross Margin

0.00%

Dividend Yield

N/A

Unlike the previous ETFs, the ProShares Short S&P500 fund is a way to bet against the S&P 500 index. An investor might seek to profit by betting against an investment, as some investors did during the bear market of 2022. It can also be used as a hedge if you think the market might be a little overvalued but aren't exactly ready to start selling your stocks.

The ProShares Short S&P500 aims to provide a return exactly the inverse of the S&P 500 index's daily return. So, if the S&P 500 is up 1% on a given day, the ProShares fund will be down 1% (before fees, which total 0.89% on an annualized basis).

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The fund might have a place in the portfolios of investors looking to hedge against what they expect to be a downturn in the market. However, remember that due to the use of derivatives contracts and the compounding effect of returns, the ProShares fund is designed only to reflect daily inverse returns of the S&P 500, not to be a buy-and-hold fund over extended periods. Fund performance will deviate from the exact inverse performance of the S&P 500.

Also, while designed to be a hedge in a bear market, this ETF will decline severely in value during a bull market. Investors should note this particular risk and understand the fund's function as a shorter-term hedge.

5. Invesco S&P 500 Equal Weight ETF

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NYSEMKT: RSP

Invesco S&P 500 Equal Weight ETF

Today's Change

(0.46%) $0.87

Current Price

$190.76

Key Data Points

Market Cap

$0B

Day's Range

$189.63 - $191.33

52wk Range

$150.35 - $192.30

Volume

9.4M

Avg Vol

Gross Margin

0.00%

Dividend Yield

N/A

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One problem with the S&P 500 is that it's a weighted index, meaning that larger companies contribute more to its performance. These days, massive tech stocks like Nvidia (NVDA -0.71%) and Microsoft make up a disproportionate amount of the index's weight.

The Invesco S&P 500 Equal Weight ETF takes a different approach. It invests in the exact same 500 companies as other S&P 500 ETFs, but it invests an equal amount of money into each one. In other words, all 500 of the companies in the index get a 0.2% weighting in the fund -- no more, no less. This can be a good ETF to consider if you want a broad index fund but aren't comfortable with a large percentage of your performance dependent on just a handful of stocks.

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About the Author

Matt Frankel, CFP, is a contributing Motley Fool stock market analyst and personal finance expert covering financial stocks, REITs, SPACs, and personal finance. Prior to The Motley Fool, Matt taught high school and college mathematics. He holds a bachelor’s degree in physics from the University of South Carolina, a master’s degree in mathematics from Nova Southeastern University, and a graduate certificate in financial planning from Florida State University. He won a SABEW award for coverage of the 2017 Tax Cuts and Jobs Act. He is also regularly interviewed by Cheddar, The National Desk, and other TV networks and publications for his financial, stock market, and investing expertise.

TMFMattFrankel

@MattFrankelCFP

John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Matt Frankel has positions in Amazon, Berkshire Hathaway, and Vanguard S&P 500 ETF. The Motley Fool has positions in and recommends Amazon, Apple, Berkshire Hathaway, Microsoft, Nvidia, and Vanguard S&P 500 ETF. The Motley Fool recommends Johnson & Johnson and UnitedHealth Group and recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.

Investing in S&P 500 ETFs

A fund that invests in the companies in the S&P 500 can be a great way to start a portfolio and invest for the long term.

Key Points

Exchange-Traded Fund (ETF)

NYSEMKT: SPY

Key Data Points

2. iShares Core S&P 500 ETF

NYSEMKT: IVV

Key Data Points

Assets Under Management (AUM)

3. Vanguard S&P 500 ETF

NYSEMKT: VOO

Key Data Points

4. ProShares Short S&P500

NYSEMKT: SH

Key Data Points

5. Invesco S&P 500 Equal Weight ETF

NYSEMKT: RSP

Key Data Points

Related investing topics

Top 3 S&P 500 Index Funds to Buy in 2025

How Bonds Work & How to Invest in Them

What Is ChatGPT and How to Invest in It

Index Funds vs. Mutual Funds: What Are the Differences?

About the Author

Premium Investing Services

Best S&P 500 ETFs

1. SPDR S&P 500 ETF Trust

2. iShares Core S&P 500 ETF

3. Vanguard S&P 500 ETF

4. ProShares Short S&P500

5. Invesco S&P 500 Equal Weight ETF

Drawbacks to investing in the S&P 500

Related investing topics

NYSEMKT: RSP

Key Data Points

Investing in S&P 500 ETFs