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Should SPDR S&P 500 ETF (SPY) Be on Your Investing Radar?
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Launched on January 29, 1993, the SPDR S&P 500 ETF (SPY - Free Report) is a passively managed exchange traded fund designed to provide a broad exposure to the Large Cap Blend segment of the US equity market.
The fund is sponsored by State Street Investment Management. It has amassed assets over $716.82 billion, making it the largest ETF attempting to match the Large Cap Blend segment of the US equity market.
Why Large Cap Blend
Companies that find themselves in the large cap category typically have a market capitalization above $10 billion. Considered a more stable option, large cap companies boast more predictable cash flows and are less volatile than their mid and small cap counterparts.
Typically holding a combination of both growth and value stocks, blend ETFs also demonstrate qualities seen in value and growth investments.
Costs
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
Annual operating expenses for this ETF are 0.09%, making it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 1.05%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Information Technology sector -- about 33.9% of the portfolio. Financials and Consumer Discretionary round out the top three.
Looking at individual holdings, Nvidia Corp (NVDA) accounts for about 7.58% of total assets, followed by Apple Inc (AAPL) and Microsoft Corp (MSFT).
The top 10 holdings account for about 39.62% of total assets under management.
Performance and Risk
SPY seeks to match the performance of the S&P 500 Index before fees and expenses. The S&P 500 Index is composed of five hundred selected stocks, all of which are listed on national stock exchanges and span over 25 separate industry groups.
The ETF has added about 1.74% so far this year and is up roughly 20.58% in the last one year (as of 01/14/2026). In the past 52-week period, it has traded between $496.48 and $695.16.
The ETF has a beta of 1.00 and standard deviation of 15.05% for the trailing three-year period, making it a medium risk choice in the space. With about 504 holdings, it effectively diversifies company-specific risk.
Alternatives
SPDR S&P 500 ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, SPY is an excellent option for investors seeking exposure to the Style Box - Large Cap Blend segment of the market. There are other additional ETFs in the space that investors could consider as well.
The iShares Core S&P 500 ETF (IVV) and the Vanguard S&P 500 ETF (VOO) track the same index. While iShares Core S&P 500 ETF has $762.71 billion in assets, Vanguard S&P 500 ETF has $851.59 billion. IVV has an expense ratio of 0.03% and VOO charges 0.03%.
Bottom-Line
An increasingly popular option among retail and institutional investors, passively managed ETFs offer low costs, transparency, flexibility, and tax efficiency; they are also excellent vehicles for long term investors.
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
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Should SPDR S&P 500 ETF (SPY) Be on Your Investing Radar?
Launched on January 29, 1993, the SPDR S&P 500 ETF (SPY - Free Report) is a passively managed exchange traded fund designed to provide a broad exposure to the Large Cap Blend segment of the US equity market.
The fund is sponsored by State Street Investment Management. It has amassed assets over $716.82 billion, making it the largest ETF attempting to match the Large Cap Blend segment of the US equity market.
Why Large Cap Blend
Companies that find themselves in the large cap category typically have a market capitalization above $10 billion. Considered a more stable option, large cap companies boast more predictable cash flows and are less volatile than their mid and small cap counterparts.
Typically holding a combination of both growth and value stocks, blend ETFs also demonstrate qualities seen in value and growth investments.
Costs
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
Annual operating expenses for this ETF are 0.09%, making it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 1.05%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Information Technology sector -- about 33.9% of the portfolio. Financials and Consumer Discretionary round out the top three.
Looking at individual holdings, Nvidia Corp (NVDA) accounts for about 7.58% of total assets, followed by Apple Inc (AAPL) and Microsoft Corp (MSFT).
The top 10 holdings account for about 39.62% of total assets under management.
Performance and Risk
SPY seeks to match the performance of the S&P 500 Index before fees and expenses. The S&P 500 Index is composed of five hundred selected stocks, all of which are listed on national stock exchanges and span over 25 separate industry groups.
The ETF has added about 1.74% so far this year and is up roughly 20.58% in the last one year (as of 01/14/2026). In the past 52-week period, it has traded between $496.48 and $695.16.
The ETF has a beta of 1.00 and standard deviation of 15.05% for the trailing three-year period, making it a medium risk choice in the space. With about 504 holdings, it effectively diversifies company-specific risk.
Alternatives
SPDR S&P 500 ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, SPY is an excellent option for investors seeking exposure to the Style Box - Large Cap Blend segment of the market. There are other additional ETFs in the space that investors could consider as well.
The iShares Core S&P 500 ETF (IVV) and the Vanguard S&P 500 ETF (VOO) track the same index. While iShares Core S&P 500 ETF has $762.71 billion in assets, Vanguard S&P 500 ETF has $851.59 billion. IVV has an expense ratio of 0.03% and VOO charges 0.03%.
Bottom-Line
An increasingly popular option among retail and institutional investors, passively managed ETFs offer low costs, transparency, flexibility, and tax efficiency; they are also excellent vehicles for long term investors.
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.