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The S&P 500 is widely recognized as the best single gauge of the large-cap U.S. equities. The index consists of the top 500 companies in the U.S. listed on major stock exchanges as per their market capitalization.
- Top 10 Constituents by Index Weight
- What is the S&P 500?
- Best S&P 500 Funds Right Now
- Best Online Brokers for Index Funds
- Diversify Your Portfolio and Derive Profits
Top 10 Constituents by Index Weight
|Symbol||Company||% Change||Price||Dividend Yield||Invest|
|$138.93||0.92 / 0.66%||Buy stock|
|$259.58||2.48 / 0.96%||Buy stock|
|BRK.B||Berkshire Hathaway Inc. New Common Stock||
|JNJ||Johnson & Johnson||
|$179.48||4.52 / 2.52%||Buy stock|
|PG||Procter & Gamble||
|$146.10||3.6532 / 2.5%||Buy stock|
|$145.23||0.16 / 0.11%||Buy stock|
What is the S&P 500?
Established in 1957, the S&P 500 was the 1st market-cap-weighted stock market index in the U.S. Currently, the S&P 500 is used globally as a benchmarking tool to reflect the market performance of leading companies from different industrial sectors. The S&P 500 has over $11.2 trillion benchmarked and a combined total of $4.6 trillion as its assets under management (AUM).
There are several exchange-traded fund (ETF) issuers that base their investment products on the S&P 500. Most notable among them are Direxion, iShares, Invesco and Vanguard. However, there are certain criteria that companies need to adhere to be included in the S&P 500.
1. As per the S&P 500 methodology, all constituents must be U.S. companies.
2. Companies must have an unadjusted market cap of $8.2 billion or greater.
3. Companies must have a float market cap of at least $4.1 billion.
4. Companies must have positive earnings reported over the most recent quarter and the last 4 quarters.
5. Company stocks must have high liquidity and trade more than 250,000 shares in each of the 6 months leading up to the evaluation date.
Best S&P 500 Funds Right Now
New investors and seasoned traders are eager to put their money behind index funds. By investing in ETFs that track the S&P 500, you can own a diverse portfolio of stocks at a margin of the cost.
There are a few factors that you need to evaluate before investing in index funds. These factors include the stock’s return rate, liquidity, company holdings composition, expense ratio and AUM.
You can consider investing in these top S&P 500 funds right now.
1. SPDR S&P 500 ETF (NYSEARCA: SPY)
The SPDR S&P 500 ETF is among the largest and most heavily-traded ETFs in the world. It exposes your portfolio to large-cap U.S. companies such as Apple, Microsoft, Amazon and Facebook. While the SPDR S&P 500 ETF can be promising for long-term investors, it is more popular among active day traders as a way to balance their portfolios between risky and safe assets.
Since its launch in 1993, SPY has an expense ratio of 0.09% and a P/E ratio of 39.87. It is very liquid, trading an average of 78.70 million shares daily and pays a 1.50% dividend yield. SPY has a 1-year return of 30.83%, a 3-year return of 14% and a 5-year return of 16.71%.
2. iShares Core S&P 500 ETF (NYSEARCA: IVV)
The iShares Core S&P 500 ETF exposes your portfolio to large and established U.S. companies. These companies include Alphabet, Berkshire Hathaway, Johnson & Johnson and Visa. This ETF can be profitable for buy-and-hold investors in the long run.
Publicly listed since 2000, the iShares Core S&P 500 ETF has an expense ratio of 0.04% and a P/E ratio of 22.35. It trades more than 87,561 shares per day. The iShares Core S&P 500 has a total AUM of $209 billion with an annual dividend yield of $6.77 per share. It has a 1-year return rate of 11.62%, 3-year return rate of 38.64% and a 5-year return rate of 76.30%.
3. Vanguard S&P 500 ETF (NYSEARCA: VOO)
Open to trade since 2010, Vanguard S&P 500 exposes your portfolio to mega-cap companies in the U.S. These companies include Microsoft, Procter & Gamble Co., NVIDIA Corp. and Mastercard.
Vanguard S&P 500 ETF has an expense ratio of 0.03%. It has an annual dividend yield over $5 per share and has a total AUM of $827.2 billion. The ETF trades more than 160,000 shares per day. It has a 1-year return rate of 28.60%, a 3-year return rate of 26.03% and a 5-year return rate of 18.41%.
4. iShares S&P 500 Growth ETF (NYSEARCA: IVW)
The iShares S&P 500 Growth ETF exposes your portfolio to stocks from industries such as information technology, consumer discretionary, communication and health care. These companies are still in the early stages of their life cycle and offer tremendous profit potential to young investors.
It has an expense ratio of 0.18% and a P/E ratio of 32.36. The iShares S&P 500 Growth ETF has an annual dividend yield of $2.80 per share. It has high liquidity and trades over 2.5 million shares per day and has a total AUM of $28 billion. iShares S&P 500 Growth ETF has a 1-year return rate of 26.54%, a 3-year return rate of 61.61% and a 5-year return rate of 107.07%.
5. SPDR Portfolio S&P 500 Growth ETF (NYSEARCA: SPYG)
The SPDR Portfolio S&P 500 Growth ETF seeks to provide investment results that correspond to the total return performance of the S&P 500 Growth Index. It exposes you to large-cap U.S. companies such as Mastercard, Adobe, PayPal and Salesforce.com.
Launched in 2000, the SPDR Portfolio S&P 500 Growth ETF has an expense ratio of 0.04% and a P/E ratio of 31.33. It has an annual dividend yield of $0.52 per share and a total AUM of $8.9 billion. SPDR Portfolio S&P 500 Growth ETF has a 1-year return rate of 26.63%, a 3-year return rate of 62.08% and a 5-year return rate of 107.47%.
6. Invesco S&P 500 Equal Weight ETF (NYSEARCA: RSP)
The Invesco S&P 500 Equal Weight ETF exposes your portfolio to multi-cap companies in the U.S. These companies include Darden Restaurant, Lam Research Corp., Twitter, Paycom Software and FedEx.
The ETF has been publicly listed since 2003. Invesco S&P 500 Equal Weight ETF has an expense ratio of 0.20% and has a P/E ratio of 18.94. It has an annual dividend yield of $2.12 per share and has a total AUM of $13 billion. Invesco S&P 500 Equal Weight ETF trades over 102,433 shares per day. It has a 1-year return rate of 3.01%, a 3-year return rate of 23.29% and a 5-year return rate of 53.73%.
Best Online Brokers for Index Funds
Index funds offer instant diversification for your stock portfolio and can be suitable for traders new to investing. Before you begin to invest your money in index funds, you need an online broker to help you buy and trade shares.
Most online brokers let you trade index funds and ETFs commission-free. These online brokers also feature advanced trading tools and educational resources to improve your trading tactics.
Here’s a rundown of the best online brokers on the market.
Webull, founded in 2017, is a mobile app-based brokerage that features commission-free stock and exchange-traded fund (ETF) trading. It’s regulated by the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA).
Webull offers active traders technical indicators, economic calendars, ratings from research agencies, margin trading and short-selling. Webull’s trading platform is designed for intermediate and experienced traders, although beginning traders can also benefit.
Webull is widely considered one of the best Robinhood alternatives.
- Active traders
- Intermediate traders
- Advanced traders
- No account maintenance fees or software platform fees
- No charges to open and maintain an account
- Intuitive trading platform with technical and fundamental analysis tools
- Does not support trading in mutual funds, bonds or OTC stocks
Moomoo is a commission-free mobile trading app available on Apple, Google and Windows devices. A subsidiary of Futu Holdings Ltd., it’s backed by venture capital affiliates of Matrix, Sequoia, and Tencent (NASDAQ: FUTU). Securities offered by Futu Inc., regulated by the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA).
Moomoo is another great alternative for Robinhood. This is an outstanding trading platform if you want to dive deep into smart trading. It offers impressive trading tools and opportunities for both new and advanced traders, including advanced charting, pre and post-market trading, international trading, research and analysis tools, and most popular of all, free Level 2 quotes.
Get started right away by downloading Moomoo to your phone, tablet or another mobile device.
- Cost-conscious traders
- Active and Advanced traders
- Over 8,000 different stocks that can be sold short
- Access trading and quotes in pre-market (4 a.m. to 9:30 a.m. ET) and post-market hours (4 p.m. to 8 p.m. ET)
- No minimum deposit to open an account.
- No chat support
E*TRADE is an online discount trading house that offers brokerage and banking services to individuals and businesses. One of the first brokers to embrace online trading, E*TRADE not only survived both the dot-com bubble and Recession — it thrived. You can choose from two different platforms (one basic, one advanced). E*TRADE is a suitable broker for traders of most skill levels, whether you want to buy mutual funds and hold them for decades or dabble in options swing trading. E*TRADE offers a library of research and education materials to help you out.
- Active traders
- Derivatives traders
- Retirement savers
- Sophisticated trading platforms
- Wide range of tradable assets
- Exceptional customer service
- Limited currency trading
- Higher margin rates than competitors
- No paper trading on its standard platform
This latest groundbreaking technology is IBKR GlobalAnalyst, a new trading tool that helps investors compare the rate of PEG or price-earnings growth valuations and provide more immediate and comprehensive financial metrics of stocks, globally.
Recognizing that stock selection can be challenging for investors to compare the valuations of domestic and international stocks, Interactive Brokers created GlobalAnalyst to offer investors a simple, yet powerful tool to easily evaluate investment opportunities around the world.
Using GlobalAnalyst, investors can search for stocks by region, country, industry, market capitalization and currency to uncover undervalued stocks worldwide. The resulting table displays the current market and financial metrics, including the PEG Ratio. The PEG Ratio is the PE ratio divided by the three-year compound earnings growth rate, and smaller PEG Ratios typically indicate undervalued companies.
- Price earnings growth valuations
- Easily evaluate investment opportunities
CenterPoint Securities is ideal for active traders who demand access to advanced tools and services. While investors and casual traders are likely to be content with the basic offerings of traditional online brokerages, active traders will benefit from CenterPoint’s suite of advanced trading tools. If you value execution quality, access to short inventory, advanced trading platforms, and accessible customer service, CenterPoint is an excellent choice.
- Intermediate to Advanced traders
- High-volume traders
- Momentum traders
- Short sellers
- Unrivaled access to short inventory
- Flexible order routing for improved executions
- Discounts for active traders
- Advanced platform with fast executions
- Reliable customer service
- Not designed for beginner or low-volume traders
Interactive Brokers’ “fee waived” no transaction fee (NTF) program offers over 150 exchange-traded funds (ETFs) which reimburse IBKR Pro clients for commissions paid on ETF shares held for at least 30 days. IBKR Lite clients always pay $0 commissions on ETFs.
IBKR provides clients from all over the globe with the
ability to invest worldwide at the lowest cost
Diversify Your Portfolio and Derive Profits
The S&P 500 tracks the performance of leading global companies. The index funds that mirror the S&P 500 have huge potential for profits in the long-run and provide instant diversification to your stock portfolio. The low expense ratios also make index funds affordable to investors with limited capital.