SPDR S&P 500 ETF is one of the largest and most heavily-traded ETFs in the world, with net assets of $173 billion, offering exposure to one of the most well-known equity benchmarks. Better known as the SPY ETF, it allocates almost all of its funds into common stocks which are included in the Standard & Poor's 500 Index, which comprises 500 large- and mid-cap U.S. stocks. While SPY certainly may have appeal to investors seeking to build a long-term portfolio and include large cap U.S. stocks, this fund has become extremely popular with more active traders as a way to toggle between risky and safe assets. The SPDR S&P 500 ETF Trust has a four-star Morningstar rating, and has generated an average annual return of just under 10% since inception.
SPDR is an acronym for the Standard & Poor's Depositary Receipts, the former name of the ETF.
The S&P 500 serves as one of the main benchmarks of the U.S. equity market and indicates the financial health and stability of the economy.
Its top 10 holdings are heavily weighted in technology companies such as Apple, Microsoft, and Amazon—approximately one-quarter of the SPY ETF is invested in the technology sector.
Their stocks collection is selected by a committee based on market size, liquidity, and industry.
The SPY is a well-diversified basket of assets, which allocates its fund into multiple sectors, such as:
24.19% Information Technology
13.55% Financial Services
11.18% Communication Services
7.17% Consumer Defensive
10.99% Consumer Cyclical
2.52% Real Estate