There's a good chance you've heard about the S&P 500. The index, established by Standard and Poor's in 1957, measures the performance of roughly 500 large U.S. companies publicly traded on the New York Stock Exchange and NASDAQ. The constituent companies are weighted by market capitalization, or the total dollar value of their issued shares.
Stocks on the S&P 500 account for about 80% of the U.S. stock market's value and the index is widely viewed as a benchmark of how well the market is doing overall. Many industries are represented, but the information technology, health care and financial sectors account for more than half of the companies on the index.
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How to invest in the S&P 500
There are several ways to invest in the S&P 500.
Buying individual S&P 500 stocks
One route investors can take is buying individual stocks of companies represented in the S&P 500.
The financial data analysis firm Marketbeat lists all of the S&P 500 stocks, sorted by market capitalization. Once you have an idea of which company you want to invest in, the next step is opening a brokerage account to facilitate a purchase.
Online trading platforms like Ally Invest and E*TRADE® offer commission-free trading.
Ally Invest®
Minimum deposit and balance
Minimum deposit and balance requirements may vary depending on the investment vehicle selected. No account minimum for Self-Directed Trading. $100 minimum for Robo Portfolios
Fees
Fees may vary depending on the investment vehicle selected. Self-Directed Trading has zero commission fees for stock, ETF, options trades; $0.50 per options contract. Robo Portfolios have zero management fees
Bonus
You may be eligible for up to $3,000 bonus cash when you open an Ally Invest Self-Directed account
Investment vehicles
Robo-advisor: Ally Invest Robo Portfolios IRA: Ally Invest Traditional, Roth and Rollover IRAs Brokerage and trading: Ally Invest Self-Directed Trading
Investment options
Stocks, bonds, ETFs, options, mutual funds, margin account and forex trading
Educational resources
Offers informational articles to help users improve their understanding of investment strategies and market trends
Terms apply.
E*TRADE
Minimum deposit and balance
Minimum deposit and balance requirements may vary depending on the investment vehicle selected. No minimum to open an E*TRADE brokerage account; minimum $500 deposit to invest in robo-advisor platform Core Portfolios
Fees
Fees may vary depending on the investment vehicle selected. Zero commission fees for stock, ETF and options trades; zero transaction fees for over 4,400 mutual funds; robo-advisor Core Portfolios charges 0.30% annual advisory fee
Investment vehicles
Robo-advisor: E*TRADE Core Portfolios IRA: E*TRADE Traditional, Roth, Rollover, Beneficiary, SEP and SIMPLE IRAs, IRA for Minors and E*TRADE Complete™ IRA Brokerage and trading: E*TRADE Trading Other: E*TRADE Coverdell ESA (Education Savings Account), Custodial Account for minors and small business retirement plans
Investment options
Stocks, bonds, mutual funds, CDs, ETFs, options and futures
Educational resources
Educational library includes in-depth articles and videos for any type of investor
Terms apply.
While S&P 500 stocks can cost thousands of dollars per share, fractional shares are an affordable way to have some skin in the game by purchasing a portion of a single share.
Through its Schwab Stock Slices™ program, Charles Schwab offers fractional shares of any stock on the S&P 500. You can choose a single slice (fractional share) to up to 30 slices, with rates as low as $5 a slice.
Similar to traditional stocks, fractional shares at Schwab are traded commission-free online.
Charles Schwab
Minimum deposit and balance
Minimum deposit and balance requirements may vary depending on the investment vehicle selected. No account minimum for active investing through Schwab One® Brokerage Account. Automated investing through Schwab Intelligent Portfolios® requires a $5,000 minimum deposit
Fees
Fees may vary depending on the investment vehicle selected. Schwab One® Brokerage Account has no account fees, $0 commission fees for stock and ETF trades, $0 transaction fees for over 4,000 mutual funds and a $0.65 fee per options contract
Bonus
None
Investment vehicles
Robo-advisor: Schwab Intelligent Portfolios® and Schwab Intelligent Portfolios Premium™ IRA: Charles Schwab Traditional, Roth, Rollover, Inherited and Custodial IRAs; plus, a Personal Choice Retirement Account® (PCRA) Brokerage and trading: Schwab One® Brokerage Account, Brokerage Account + Specialized Platforms and Support for Trading, Schwab Global Account™ and Schwab Organization Account
Investment options
Stocks, bonds, mutual funds, CDs and ETFs
Educational resources
Extensive retirement planning tools
Terms apply.
SoFi Invest also lets you buy fractional shares for as little as $5 with no commission fees. Investors have access to more than 4,000 stocks and exchange-traded funds (ETFs).
SoFi Invest®
Minimum deposit and balance
Minimum deposit and balance requirements may vary depending on the investment vehicle selected. No account minimum for active or automated investing, or to participate in IPOs. $5 minimum to own a fractional share of a company.
Fees
Fees may vary depending on the investment vehicle selected. Active investing has zero commission fees for trading stocks and ETFs (exchange and fund management fees may apply). Automated investing has zero management fees
Bonus
Download the SoFi app and get up to $1,000 when you open an Active SoFi Invest® Brokerage Account. SoFi covers up to $75 of any transfer fees your brokerage may charge when you transfer an account to SoFi
Investment vehicles
Robo-advisor: SoFi Automated Investing IRA: SoFi Traditional, Roth, SEP and Rollover IRAs Brokerage and trading: SoFi Active Investing
Investment options
Stocks, bonds, ETFs, fractional shares and IPO participation
Educational resources
Investors can create a personal watchlist that follows their stocks to stay up to date and receive the latest investing news
Terms apply.
Buying into S&P 500 index funds or ETFs
Another option is a low-cost S&P 500 mutual fund or ETF, both of which mirror the index and typically carry less risk than investing in individual stocks.
An S&P 500 fund or ETF tries to replicate the performance of the index by investing in listed companies and working to match the index's performance. This gives investors broad exposure to the leading U.S. companies without having to buy into them individually.
Most major brokerages offer an S&P 500 fund or ETF, including Vanguard and Fidelity. You can also invest through apps like Robinhood or through robo-advisors like Betterment and Wealthfront, which use algorithms to tailor a portfolio based on your age, investment goals, time horizon, risk tolerance and other considerations.
Betterment
Minimum deposit and balance
Minimum deposit and balance requirements may vary depending on the investment vehicle selected. For example, Betterment doesn't require clients to maintain a minimum investment account balance, but there is a ACH deposit minimum of $10. Premium Investing requires a $100,000 minimum balance.
Fees
Fees may vary depending on the investment vehicle selected, account balances, etc. Click here for details.
Investment vehicles
Robo-advisor: Betterment Digital Investing IRA: Betterment Traditional, Roth and SEP IRAs 401(k): Betterment 401(k) for employers
Investment options
Stocks, bonds, ETFs and cash
Educational resources
Betterment offers retirement and other education materials
Terms apply. Does not apply to crypto asset portfolios.
Wealthfront
Minimum deposit and balance
Minimum deposit and balance requirements may vary depending on the investment vehicle selected. $500 minimum deposit for investment accounts
Fees
Fees may vary depending on the investment vehicle selected. Zero account, transfer, trading or commission fees (fund ratios may apply). Wealthfront annual management advisory fee is 0.25% of your account balance
Bonus
None
Investment vehicles
Investment options
Stocks, bonds, ETFs and cash. Additional asset classes to your portfolio include real estate, natural resources and dividend stocks
Educational resources
Offers free financial planning for college planning, retirement and homebuying
Terms apply.
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Bottom line
The S&P 500 index encompasses hundreds of top U.S. companies. Investors can buy stocks or fractional shares of listed companies or invest in S&P 500 funds or ETFs through brokerages and robo-advisors.
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