Hi everyone, I’m a newcomer, nice to meet you. I have a perhaps trivial question to ask you, for you experts in the field. I recently opened an account on IB, and I wanted to ask you if you could kindly point me to an ETF that replicates the S&P 500 on the US stock market. Currently I have seen that you can only invest on the I believe index which is worth approximately 4900 CHF and I have not found anything fractional like for example on Degiro Broker which I currently use. Thank You
Welcome to the forum Mr-Sound_X1!
The most popular ETF for the S&P 500 (large caps in the US) is SPY, which is also one of the oldest ETFs in the world. iShares also has one (IVV) and Vanguard (VOO).
(This is not advice to buy anything, I am just a guy on the internet)
Thank you very much for your kindly answer, Are they in IB available under the ticker you Sayed ? Tnx
You are welcome. I think so, but you need to make sure you pick the right exchange to get the small fees.
Sound god Thx again : )
S&P 500 is probably the index that has most ETFs replicating it. Definitely in US. 3 biggest by managed assets ETFs in US, and probably also in the world (I don’t know about Japan), are replicating it: SPY, VOO and IVV.
Nevertheless, before picking an ETF on this index, you should answer few questions about your stocks investment basket:
- What markets you want to invest into? All world? Developed Countries? US only (I don’t recommend)?
- What domicile of ETFs you are comfortable with? Only Europe or US also?
- And then you can start chosing specific ETFs.
Thanks for your kind reply, let’s say I’m not really a begginer, well, the thing that interests me most is being able to buy ETFs on the S&P500 in the US market, for this reason I opened an account on IB. Then I am well aware that it would be appropriate to have a world portfolio as you say, but the global economic situation does not seem to be the best. Correct me if I’m wrong, also because I understand that you only disagree with the S p 500 individually. NO?
And the US is doing better than the global economy?
No one has the magic crystal ball. No offense, but saying you are not a beginner, but don’t know or can’t find by yourself an index that is replicating the S&P 500 doesn’t add up in my book.
What is your rational behind investing in ths S&P 500 compared to an all-world ETF?
Well, let’s say I don’t completely understand what you mean, but there are 2 aspects:
Do you want to invest to US only (I don’t). Or you (want to) invest via multiple ETFs into different geographies? Anyway, this is your decision.
Specifically for US, there are like 5-6 common “total market”/“large cap” market indices being replicated by ETFs, plus few less known ones.
S&P 500 (and S&P 1500) are rather specific ones, because included companies are required to be profitable and there is a committee deciding what companies to take as components. Are you aware of that? Is that what you want?
Others take all companies up to a certain capitalization limit: MSCI USA (600+ components), Russell 1000/3000, total market ETFs: VTI and ITOT.
There is a couple of equal weighted ones and of course all kinds of “strategy” ETFs.
No offense, but the word “begginer” as it is pronounced can have various meanings, depending on the context, evidently whoever interprets it should do a review of grammar, regardless of this I brought my opinion and asked for advice on a ETF since if you re-read above I said that I opened an IB account and I didn’t know the ticker… otherwise I’m not a broker, a banker, I don’t work in finance, but a simple retail investor and I’m trying to invest as best I can , also taking the opinion of the most experts and making use of it. The reason why I asked for information on the S&P 500 as I see it is that the USA is historically a defined and solid market and as I personally have a low risk appetite it seems to me to be the most obvious thing to do to create a portfolio in line with a vision long-term.
I repeat, I am not a finance expert. But I am trying to grasp the necessary information to be able to study as best I can, also listening to the advice (obviously non-financial) of experts in the field or of those who have been investing for a long time and have experience. As I told you I would be inclined towards the US markets and I wasn’t aware of everything you reported, I thank you, I think it’s the right spirit in sharing information like this to grow in the markets and learn about new things that are useful to users. Then could you kindly clarify why in your opinion it would be better to choose an ETF
global specific? Thank you
Well, in the end it comes to one thing: because we don’t know the future.
At 60% or so country weight in “World” equity ETFs (e.g. VT), you would already be strongly “inclined” towards the U.S. in such ETFs.
If that’s the case, choosing to invest in a single economy of the world (even though it does business all over it) doesn’t seem to be the most risk averse / diversified approach.
I’d begin with VT and then continue analyzing and contemplating reasons (if any) to deviate from the “all world ETF”.
SPY is about $450 per share.
You don’t need to be a broker to find a ticker with 2 min google search
Which experts? Look, I’m extremly skeptical with experts prediciting how the future will look like. 1 in a 100 may be right this time, but he won’t be the next time, it’s pure luck. If you find someone who can consistently predict the future correctly, please tell me
Past performance is no indicator for future performance. As Mark Twain said “History does not repeat it, but it does rhyme.” Maybe the US will be the next Japan, maybe it will skyrocket, no one knows.
If you have a low risk appettite, you shouldn’t invest in a single market, you should diversify your assets. Do you have bonds in your portfolio as well?
Also keep in mind that US companies in average doing better than companies in other parts of the world is already the market expectation, which is a reason why the average P/E ratio for US stocks is higher and why US companies make up 60% of the global market cap. I.e., to solely bet on the US stock market, you should not only be convinced that US companies will do better, you should be convinced that they will do better than what is already priced in as part of the market expectation.
If you don’t think you know better than the overall market, the lower risk approach would be to diversify as much as you can by buying an all-world ETF.
If you want to go invest in S&P 500, just buy VOO. (and it is in USD so remember to first buy USD)
I’ll try to summarize, so given my propensity for my type of risk, the best would be to diversify (and I find it more than right) then I am aware of the fact that the USA will not have dominance on the markets forever but for at least 5-10 years in my opinion, before other economies such as the BRICS take dominance and manage to separate themselves from the Dollar, in my opinion, there is still margin to make good profits. Then obviously, no one has a crystal ball, predicts the future, works magic etc…etc… as someone mentioned. for close, The important thing is not to keep the money you manage to put aside to inflate in the bank
P.s. I know how to use Google very well (for the ticker skeptics) but for once it seemed easier to ask and create a constructive discussion
Thanks to everyone
Not yet. and honestly, I never thought to buy.