The SPDR S&P 500 trust is an ETF (exchange-traded fund), which trades on the NYSE Arca stock exchange, under its ticker SPY.
SPDR is an acronym for the Standard & Poor's Depositary Receipts, which is the former name of the ETF, originally issued by State Street Global Advisors in 1993.
An exchange-traded fund is a financial instrument giving investors exposure to a basket of securities.
SPY is not only the oldest ETF, but also the most popular in the US. The fund tracks the performance of the popular S&P 500 stock market index, composed of the largest 500 US companies.
Companies in the index include Amazon, Apple, Google, Facebook, Microsoft, Berkshire Hathaway, Johnson & Johnson, Visa, JP Morgan Chase and Procter & Gamble.
SPY stock price
As SPY tracks the S&P 500 index, its share price is deeply correlated to the quarterly and annual revenues of the 500 publicly-traded companies that constitute it.
The SPY ETF is a cost-effective financial instrument, with only a 0.09% net expense ratio. This means that for every $1,000 invested, it only costs less than $1.00 in annual fees to maintain.
For many investors, SPY is also the perfect tool to hedge against volatility, as risk is spread across multiple companies, instead of individual stocks.
However, the SPY ETF can also be seen as redundant and conservative by more confident investors, who prefer to handpick the most promising and innovative companies.
Looking at the SPY stock price, the share looks unaffordable for people in many parts of the world. However, at Uphold, you don’t have to buy a whole share. As with cryptocurrencies, you can buy a fraction, and invest as little as $1.00 in SPY.
The SPY stock value is ultimately determined by the law of the markets: supply and demand. Traders around the world put up ask (sell) and bid (buy) orders. The result is the current SPY price, which changes constantly.
What the bears are saying
- Misses the big gains: SPY is usually praised as a reliable hedge to volatility, but that also means it misses out on the bigger moves from smaller and more promising companies.
- American decline: The S&P 500 index is a thermometer of the US economy. However, some experts argue that the US's economic dominance has peaked. Emerging markets, such as Latin America and Asia, may be bigger winners in the decades to come.
- Too much diversification is not good: Buying SPY stock may be considered the safer, more conservative choice. However, a lot of savvy investors easily outperform SPY, year after year, through stock picking.
What the bulls are saying
- Impeccable track record: The SPDR S&P 500 Trust is the largest, most popular ETF for many reasons. Since its inception, it has outperformed many mutual funds, achieving 8.93% annual returns on average.
- Volatility shelter: Purchasing SPY shares helps investors spread their risk amongst the largest and most successful companies in the US.
- The art of simple investing: Buying SPY can be a cost-effective and simple way of gaining exposure to a broad range of U.S. stocks, suitable for new and experienced investors alike.
How to invest in SPY stock with Uphold
Do you want to invest in the SPY ETF with USD? You only need a verified Uphold account to buy SPY shares fast.
Here’s how easy it is to get started:
- Go to Uphold.com and click ‘Sign up’.
- Enter your email address, create a password, and complete an identity check.
- Your account will then be activated, and you can start using Uphold.
You can then fund your account with your debit card, credit card, bank account, or crypto deposit.
Your Uphold account can be used to make payments to vendors, send money to friends on the other side of the world, and more.
Uphold’s unique ‘Anything-to-Anything’ trading experience will make any exchange a seamless process, all commission-free.
*U.S. stock trading is not available in the U.S., U.K., and certain other.
This article is for informational purposes only and takes no account of particular personal or market circumstances, and should not be relied upon as investment, tax, or legal advice. For investment, tax, or legal advice, and before taking any action you should consult your own advisors. Note that assets such as equities present unique risks for investors.
This content is correct as of October 2020
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