Why Consider Investing in the S&P 500® Index A proven track record of excellence
When it comes to investing, every destination has a starting point. Whether you’re just beginning your investing journey or looking to build your portfolio’s foundation, the S&P 500® has been a starting point for generations of investors.
Read on to discover what makes this index so powerful—and why it continues to be one of the most popular ways to pursue long-term wealth.
More than just a stock index, the S&P 500 is a symbol of strength, scale, and resilience. It captures the collective performance of the US economy—companies that shape the way we live, work, and connect with the world.
So, why invest in the S&P 500? Because getting where you want to go financially often starts with a trusted foundation.
The S&P 500: A trusted stock market proxy
Since 1958, music fans check the Billboard Top 100 weekly to see which songs are trending, dominating the charts, or falling off the radar. It’s more than a ranking—it’s a dynamic list that captures the pulse of the music industry in real time, not just on past performance, but on relevance and current impact. These charts evolve constantly, capturing the energy of each moment in pop culture by highlighting the artists making the biggest impact.
The S&P 500 works the same way for the US stock market and greater global economy. The index reflects the current top 500 publicly traded US companies by market size and overall financial health. But it’s not a static list of legacy names: it’s dynamic, rebalanced four times a year to represent the strongest performers in the market. And so, the index acts as a real-time snapshot of the strength, innovation, and leadership of the world’s largest economy.
More specifically, the S&P 500 Index is comprised of 503 holdings,1 consisting of the biggest large- and mega-cap companies traded on American stock exchanges and businesses that impact our daily lives. The list includes:
- Innovation tech giants like Apple and NVIDIA
- Healthcare innovators like Pfizer
- Consumer brands like Coca-Cola and Costco Wholesale
- Financial leaders like S&P Global and Nasdaq
- And so many more
Due to its sheer size, immense scale, and the recognition of so many household name brands, many investors turn to the index.
Built to endure: A history of resilience and milestones
Since its inception on March 4, 1957, the S&P 500 has demonstrated a remarkable ability to increase market share over time, bounce back after times of volatility, and keep moving forward—surviving a notable list of economic downturns and periods of tremendous market movement and enduring through them over time.
Figure 1: Every decade has seen market and economic downturns
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Source: SPDR Americas Research, as of June 20, 2025.
The S&P 500 Index isn’t immune to volatility. But through every market disruption, the index not only recovered—it thrived, surpassing an index level of 1,000 in 1998, 3,000 in 2019, and breaking 5,000 for the first time in early 2024.2 And over the long term, the S&P 500 has delivered average annual returns of around 10%,3 though actual year-to-year results vary.
The benefits of S&P 500 Index exposure
For many investors, the S&P 500 offers a rare combination of advantages, especially for those focused on long-term growth:
The risks of investing in the S&P 500
No investment is risk-free—including the S&P 500. It’s important for investors to be aware of the risks involved before making a decision to invest:
- Market risk: Like any equity investment, the index is subject to market fluctuations. Periods of volatility—whether due to economic uncertainty, interest rates, or geopolitical tension—can affect the performance of the underlying stocks within the index.
- Concentration risk: While diversified, the index is market-cap weighted. This means a few mega-cap tech stocks can drive a large share of returns—and losses.
- Short-term declines: In any given year, the S&P 500 can (and has) posted negative returns. Prior to investing, investors should be prepared for inevitable ups and downs.
Despite these risks, the S&P 500 has historically provided favorable outcomes to those who stay invested for the long term.
Get the performance of the S&P 500 in a single trade
There are many ways to access the S&P 500, but few are as efficient, transparent, and time-tested as the State Street® SPDR® S&P 500® ETF Trust (S27), the first-ever exchange traded fund (ETF) designed to track the index.
With S27, you don’t have to build a US large-cap equity allocation with individual stocks on your own—you can rest easy knowing the ETF does the work for you, giving you exposure to a resilient index with a proven track record in a single trade. It’s one of the most straightforward ways to gain diversified exposure to the US large-cap equity market—without the complexity or cost of managing hundreds of individual positions.
Launched in 1993 as the first US-listed ETF, and later cross-listed in Singapore, the State Street® SPDR® S&P 500® ETF Trust closely mirrors the performance of the S&P 500 Index6—through bull markets, bear markets, and everything in between (Figure 3). As investors navigate economic shifts, rate cycles, and innovation-driven growth, the State Street® SPDR® S&P 500® ETF Trust continues to be the trusted tool for accessing broad-market performance with efficiency and scale.
What’s next for today’s dynamic ETF market?
As the market continues to evolve, stay ahead of top trends and bold predictions for the future in our latest ETF Impact Report.
S27: A resilient signal of strength
S27 isn’t just a way to access the S&P 500—it’s a cornerstone of the modern ETF industry. Built for scale and designed for flexibility, S27 has become a foundational building block for all types of investors.
Whether you’re making a strategic long-term allocation or quick tactical moves in real time, S27 delivers broad market exposure with the efficiency of a single trade. And thanks to its transparency and tradability, it continues to serve as a reliable signal of market strength, especially in times of volatility.
Why investors turn to S27
- An established track record: State Street® SPDR® S&P 500® ETF Trust has closely tracked the performance of the S&P 500® Index for 30-plus years. Investors value this consistency, especially when aiming to capture broad market movements.
- Trusted providers: S27 is managed by State Street Investment Management, an ETF pioneer and one of the world’s largest asset managers, and it is benchmarked to the S&P 500 Index from S&P Dow Jones Indices, one of the most trusted index providers.
- Diversification in a single trade: S27 touches nearly every corner of the US economy, giving investors broad exposure to the world’s largest market and many of its most recognized brand names in a single trade.
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Reaching your financial goals could start with S27
For investors focused on long-term growth potential, the S&P 500 Index isn’t just a benchmark—it’s a starting point. A launchpad. A way to participate in the strength, the leadership, the innovation, and the resilience of the US economy.
In a world filled with complexity, market noise, and endless investment options, the S&P 500 offers focus. It’s where the journey begins—and, for many, where progress happens.