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What Is The SPY ETF?

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Key takeaways

  • SPY is an index fund that tracks the S&P 500 Index. Investing in it offers publicity to about 500 of the most important U.S. firms.
  • Investing in SPY presents prompt diversification to your portfolio for a low price, which is a pretty choice for passive traders. Nevertheless, SPY is topic to the identical market volatility as another equity-based funding.
  • SPY was the primary ETF listed within the U.S. and stays essentially the most actively traded ETF on this planet.

The SPDR S&P 500 ETF belief, listed on the New York Inventory Alternate as SPY, is a well-liked exchange-traded fund (ETF) that tracks the efficiency of the S&P 500 index. SPY, which debuted in 1993, was the primary ETF listed within the U.S. The fund presents traders publicity to round 500 of the most important firms within the U.S.

Right here’s extra about how the SPY ETF works and easy methods to put money into it.

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How the SPY ETF works

SPY holds a diversified portfolio of securities that intently match the important thing threat elements and traits of the complete S&P 500 index.

Initially launched in 1993, SPY is managed by State Avenue World Advisors, and as of mid-2025, it has $616.1 billion in belongings below administration and is essentially the most actively traded ETF globally.

The worth of 1 share of SPY is designed to be one-tenth the worth of the S&P 500 Index. The ETF has generated a mean annual return of greater than 10 % since its inception.

What sectors is the SPY ETF invested in?

The highest 5 sectors in SPY are info expertise, financials, shopper discretionary, communication companies and well being care.

Fund sector allocation

Sector Weight
Info expertise 32.76%
Financials 14.13%
Client discretionary 10.40%
Communication companies 9.69%
Well being care 9.46%
Industrials 8.62%
Client staples 5.55%
Vitality 3.00%
Utilities 2.40%
Actual property 2.06%
Supplies 1.92%
Supply: State Avenue World Advisors (as of July 2, 2025)

Index sector allocation

Sector Weight
Info expertise 32.76%
Financials 14.13%
Client discretionary 10.40%
Communication companies 9.69%
Well being care 9.46%
Industrials 8.62%
Client staples 5.55%
Vitality 3.00%
Utilities 2.40%
Actual property 2.06%
Supplies 1.92%
Supply: State Avenue World Advisors (as of July 2, 2025)

SPY’s holdings

The tables under evaluate SPY to the S&P Index’s holdings. As you may see, the odds are intently matched usually.

Fund prime holdings

Title Shares held Weight
NVIDIA Corp 295,394,977 7.13%
Microsoft Corp 90,331,712 6.97%
Apple Inc 181,524,535 5.92%
Amazon.Com Inc 114,835,986 3.97%
Meta Platforms Inc Class A 26,385,555 2.98%
Broadcom Inc 57,142,268 2.37%
Alphabet Inc Cl A 70,729,666 1.95%
Tesla Inc 33,770,890 1.78%
Berkshire Hathaway Inc Cl B 22,284,868 1.71%
Alphabet Inc Cl C 57,054,166 1.58%
Supply: State Avenue World Advisors (as of July 2, 2025)

S&P 500 index prime holdings

Title Weight
NVIDIA Company 7.13%
Microsoft Company 6.97%
Apple Inc. 5.92%
Amazon.com Inc. 3.97%
Meta Platforms Inc Class A 2.98%
Broadcom Inc. 2.37%
Alphabet Inc. Class A 1.95%
Berkshire Hathaway Inc. Class B 1.71%
Tesla Inc. 1.61%
Alphabet Inc. Class C 1.58%
Supply: State Avenue World Advisors (as of July 2, 2025)

Advantages of the SPY ETF

Many traders flip to index funds for diversification, tax effectivity, low charges and minimal upkeep. SPY presents publicity to greater than 500 of the most important shares within the U.S. multi functional fund, which might be a lot easier than investing in lots of particular person firms’ shares.

Dangers of the SPY ETF

Whereas SPY is a cheap and extremely liquid funding choice for traders, it’s additionally topic to the identical dangers as another funding within the inventory market, together with market volatility, and financial and geopolitical dangers. The worth of fairness securities can fluctuate and should decline considerably as a result of actions of particular person firms and common market and financial situations.

How you can put money into the SPY ETF

Buyers should purchase and promote shares of SPY or different ETFs or shares with a brokerage account or a self-directed funding account, reminiscent of an IRA. Buyers who work with a dealer or monetary advisor can direct their funds to be invested in SPY.

Backside line

The SPY ETF is a cheap funding choice for traders seeking to acquire publicity to about 500 massive US firms. Nevertheless, it’s also topic to the identical dangers as another funding within the inventory market, together with market volatility, and financial and geopolitical dangers. That stated, for traders seeking to diversify their portfolios, the SPY ETF is a stable choice.

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Editorial Disclaimer: All traders are suggested to conduct their very own unbiased analysis into funding methods earlier than investing resolution. As well as, traders are suggested that previous funding product efficiency isn’t any assure of future value appreciation.

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