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
| 1970s | - 1973 Arab Oil Embargo |
| 1980s | - Energy Crisis Recession - Black Monday Crash of 1987 |
| 1990s | - Dot-com Bubble Burst |
| 2000s | - 9/11 Terrorist Attacks - 2008 Great Financial Crisis (GFC) |
| 2010s | - The Flash Crash of 2010 - The US Sovereign Downgrade in 2011 - Volmageddon in 2018 - The December 2018 Drawdown |
| 2020s | - COVID-19 Pandemic - 2023 Regional Banking Crisis - Liberation Day 2025 |
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.
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Build wealth by investing in the S&P 500’s long-term potential.
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Source: Bloomberg Finance, L.P., as of December 31, 2024. S&P 500 Index performance shown is based on historical data only. Past performance is not a reliable indicator of future performance. The S&P 500 is a market-capitalization weighted index of large-cap US stocks and does not reflect the performance of any individual investment. Index returns are unmanaged and do not reflect the deduction of any fees or expenses. Index returns reflect all items of income, gain and loss and the reinvestment of dividends and other income. All the index performance results referred to are provided exclusively for comparison purposes only. It should not be assumed that they represent the performance of any particular investment.
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:
1. Diversification, delivered
With 500+ companies spanning every major sector—from industrials to information technology—the S&P 500 provides instant diversification, meaning your investment portfolio isn’t overly concentrated in any one company, industry, or investment.
Why it matters: Instead of trying to build your own portfolio or betting on single stocks, you’re investing in a portfolio of holdings, each contributing to performance in their own way.
2. Consistency over complexity
The S&P 500 takes the guesswork out of investing. Instead of trying to time the market or identify the next breakout stock, you're investing in a strategy that’s already stood the test of time.
Why it matters: Investing in an S&P 500 index fund or ETF can be especially appealing if you’re an investor who prefers a “set it and forget it” approach.
Compare two ETFs to start your S&P 500 journey
Seeking exposure to the S&P 500 Index? Compare two SPDR ETFs to determine which may be a better fit for your specific investment style and priorities.
3. Powerful long-term potential
Over decades, the index has provided long-term growth potential to patient and steady investors. Many swift and sizable recoveries have historically followed steep declines.4 And the reality is this: some of the markets best days have occurred after their worst, as out of the worst 20 days, the market was up on 17 of the following days—four of which were in the top 20 performing days of all time.5
Why it matters: While short-term swings can be unsettling, history has shown that time in the S&P 500—not timing the S&P 500—tends to lead to more successful outcomes over the long term.
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 SPDR® S&P 500® ETF (SPY), the first-ever exchange traded fund (ETF) designed to track the index.
With SPY, 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.
And when it comes to S&P 500 ETFs, SPY set the standard and continues to stand out from the competition.
Launched in 1993 as the first US-listed ETF, SPY has delivered more than 30 years of performance that closely mirrors the performance of the S&P 500 Index—through bull markets, bear markets, and everything in between (Figure 3). As investors navigate economic shifts, rate cycles, and innovation-driven growth, SPY continues to be the trusted tool for accessing broad-market performance with efficiency and scale.
SPY milestones that moved the market
Over the past three decades, SPY has not only tracked the S&P 500—it has helped define the industry itself. From pioneering the market as the first US-listed ETF to becoming the world’s most traded ETF,6 SPY’s story is one of innovation, scale, and resilience.
Figure 4: SPY’s history of milestones
| 1993 | SPY launches as the first US ETF, revolutionizing market access for all types of investors. |
| 2004 | SPY becomes the first ETF to trade over $1 trillion in a single year.⁷ |
| 2008–2009 | SPY weathers the financial crisis, proving the resilience of ETFs. |
| 2013 | SPY surpasses $100 billion in assets under management.⁸ |
| 2020 | Record trading volume during COVID-19—$100 billion in a single day—solidifies SPY’s role as a liquidity leader.⁹ |
| 2025 | SPY trades more than $126 billion on April 7, 2025, an all-time record for SPY and any ETF.¹⁰ |
These milestones show more than longevity. They reflect trust, adaptability, and proven utility in evolving market conditions.
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.
SPY: A resilient signal of strength
SPY 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, SPY 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, SPY 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 SPY
- Record liquidity: SPY is the world’s most traded ETF,11 giving investors the ability to tap into unmatched liquidity and portfolio flexibility to implement sophisticated trading strategies.
- An established track record: SPY 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: SPY 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: SPY 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.
- Lower trading costs: While SPY has a higher expense ratio than other S&P 500® ETFs, its liquidity and tight bid-ask spreads often result in lower overall trading costs, especially for frequent traders.12
- Scale and size: SPY isn’t just part of the market. In many ways, it is the market:
Figure 5: The size and scale of SPY
On any given day, 52.8 million shares of SPY are traded. That’s eight million shares an hour, 135,000 shares a minutes, and 2,200 shares per second. 13
SPY trades $41 billion a day, on average. That’s roughly 3.64x more than Apple—or more than the volume of Microsoft, Amazon, and Meta combined. 14
SPY trading volume exceeds every single stock in the S&P 500 index on an average 1-month basis. 15
Over the past decade, one in every four US ETF trading dollars has flowed through SPY. 16
Reaching your financial goals could start with SPY
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.
With SPY, you can gain diversified, transparent, and highly liquid exposure in a single trade. Because when it comes to building toward your goals, investing in SPY can help you get there.