How do I invest in the S&P 500?

Individuals can invest in the S&P 500 through index funds or ETFs that follow the index. Investors can choose a taxable brokerage account, a 401 (k), or an IRA. The S&P 500 index tracks the largest companies in the United States based on factors like market capitalization, sector allocation, and liquidity.

What is a S&P 500 index fund?

The S&P 500 Index was launched in 1957 as the first U.S. market-cap-weighted equity index and is considered the best single gauge of large-cap U.S. equities. The S&P 500 tracks the largest U.S. companies based on market capitalization. An S&P 500 Index fund can help investors gain broad exposure to the constituent stocks in the S&P 500 index.

What are the different types of S&P 500 funds?

Nearly all major brokerages and fund companies offer some type of S&P 500 fund, such as the iShares S&P 500 Value ETF ( IVE ), the SPDR Portfolio S&P 500 Value ETF ( SPY ), and the Vanguard S&P 500 Value ETF ( VOO ). S&P 500 index funds tend to have slightly higher fees than ETFs because of higher operating expenses.