SPDR S&P 500 ETF Trust (SPY): Complete Beginner's Guide
SPDR S&P 500 ETF Trust (SPY) is a u.s. large-cap blend ETF from State Street Global Advisors with an expense ratio of 9.45% and $600.0B in assets under management. Our Beginner Suitability Score: 9/10 (Great for Beginners). 5-year annualized return: 15.70%.
Last updated: April 2026
State Street Global Advisors • U.S. Large-Cap Blend
Expense Ratio
9.45%
AUM
$600.0B
Dividend Yield
1.20%
Inception
1993
Beginner Score
9/10
What is SPDR S&P 500 ETF Trust?
SPY was the very first ETF listed in the United States and remains the most heavily traded ETF in the world. Like VOO, it tracks the S&P 500 index, but SPY is especially popular among active traders due to its enormous daily trading volume. Beginners should know that SPY and VOO hold the same stocks, but SPY has a slightly higher expense ratio.
SPY is managed by State Street Global Advisors and has been available since 1993. With $600.0B in assets under management, it's one of the largest and most liquid ETFs available. The fund charges an expense ratio of 9.45%, which means for every $10,000 you invest, you pay approximately $945 per year in management fees.
SPY at a Glance — Key Metrics
| Expense Ratio | 9.45% |
| Total Holdings | 503 |
| P/E Ratio | 25.8 |
| Beta | 1.00 |
| Dividend Yield | 1.20% |
| AUM | $600.0B |
| Inception Year | 1993 |
| Issuer | State Street Global Advisors |
Top 10 Holdings in SPY
SPY holds 503 different securities. Here are the largest positions that make up the core of this fund:
| # | Company | Ticker | Weight |
|---|---|---|---|
| 1 | Apple Inc. | AAPL | 7.20% |
| 2 | Microsoft Corp. | MSFT | 6.50% |
| 3 | NVIDIA Corp. | NVDA | 6.20% |
| 4 | Amazon.com Inc. | AMZN | 3.80% |
| 5 | Meta Platforms Inc. | META | 2.70% |
| 6 | Alphabet Inc. Class A | GOOGL | 2.30% |
| 7 | Berkshire Hathaway Inc. | BRK.B | 1.90% |
| 8 | Alphabet Inc. Class C | GOOG | 1.90% |
| 9 | Broadcom Inc. | AVGO | 1.80% |
| 10 | Tesla Inc. | TSLA | 1.70% |
SPY's top holding is Apple Inc. (AAPL) at 7.20%, followed by Microsoft Corp. (MSFT) at 6.50% and NVIDIA Corp. (NVDA) at 6.20%. The top 10 holdings account for 36.00% of the fund's 503 total positions.
View data table
| Rank | Company | Ticker | Weight |
|---|---|---|---|
| 1 | Apple Inc. | AAPL | 7.20% |
| 2 | Microsoft Corp. | MSFT | 6.50% |
| 3 | NVIDIA Corp. | NVDA | 6.20% |
| 4 | Amazon.com Inc. | AMZN | 3.80% |
| 5 | Meta Platforms Inc. | META | 2.70% |
| 6 | Alphabet Inc. Class A | GOOGL | 2.30% |
| 7 | Berkshire Hathaway Inc. | BRK.B | 1.90% |
| 8 | Alphabet Inc. Class C | GOOG | 1.90% |
| 9 | Broadcom Inc. | AVGO | 1.80% |
| 10 | Tesla Inc. | TSLA | 1.70% |
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SPY Performance History
Here's how SPY has performed over different time periods. Remember that past performance doesn't guarantee future results, but it gives you a sense of the fund's track record:
YTD
3.10%
1 Year
26.50%
3 Year
11.10%
5 Year
15.70%
10 Year
13.20%
SPY has returned 15.70% annualized over 5 years and 13.20% over 10 years. YTD return is 3.10%.
View data table
| Period | Return |
|---|---|
| YTD | 3.10% |
| 1 Year | 26.50% |
| 3 Year | 11.10% |
| 5 Year | 15.70% |
| 10 Year | 13.20% |
Beginner Suitability Score: 9/10
Our proprietary Beginner Suitability Score evaluates ETFs based on five factors that matter most to new investors: fees, volatility, diversification, dividend history, and track record length.
SPY scores 9/10 because it has very low fees, shows lower-than-average volatility, offers broad diversification across 503 holdings, and has been available since 1993, giving it a proven track record.
How to Buy SPY — Step by Step
- Open a brokerage account — We recommend Fidelity, Charles Schwab, or Vanguard for ETF investing. All offer $0 commissions on ETF trades.
- Fund your account — Transfer money from your bank. You can start with as little as $1 if your broker offers fractional shares.
- Search for "SPY" — Use the search bar in your brokerage platform to find SPDR S&P 500 ETF Trust.
- Place your order — Choose "Market Order" for simplicity or "Limit Order" if you want to set a specific price. Enter how many shares (or dollar amount) you want to buy.
- Set up automatic investing — Most brokers let you schedule recurring purchases (e.g., $100/month on the 1st). This is dollar cost averaging in action.
SPY Sector Allocation
Here's how SPY distributes its investments across different sectors of the economy:
SPY's largest sector allocation is Information Technology at 31.8%, followed by Financials at 13.3% and Health Care at 11.7%.
View data table
| Sector | Weight |
|---|---|
| Information Technology | 31.8% |
| Financials | 13.3% |
| Health Care | 11.7% |
| Consumer Discretionary | 10.4% |
| Communication Services | 8.9% |
| Industrials | 8.3% |
| Consumer Staples | 5.7% |
| Energy | 3.5% |
| Utilities | 2.5% |
| Real Estate | 2.2% |
| Materials | 2.1% |
Dollar Cost Averaging Into SPY
Here's what consistent monthly investing could look like over time, assuming an average annual return of 8% (approximate historical stock market average):
| Monthly | 10 Years | 20 Years | 30 Years |
|---|---|---|---|
| $100/mo | $18,417 | $59,295 | $150,030 |
| $250/mo | $46,041 | $148,237 | $375,074 |
| $500/mo | $92,083 | $296,474 | $750,148 |
*Projections assume 8% average annual return with monthly compounding. Actual returns will vary. Past performance doesn't guarantee future results.
Fee impact: With SPY's expense ratio of 9.45%, a $10,000 investment would lose approximately $39,143 to fees over 20 years compared to a zero-fee investment. This is significant — consider whether the fund's strategy justifies these costs.
SPY's expense ratio of 9.45% costs $39,143 on a $10,000 investment over 20 years (assuming 8% annual return). Without fees, the investment would grow to $46,610 instead of $7,467.
View data table
| Year | Without Fees | With Fees | Fee Cost |
|---|---|---|---|
| 0 | $10,000 | $10,000 | $0 |
| 5 | $14,693 | $9,296 | $5,397 |
| 10 | $21,589 | $8,641 | $12,948 |
| 15 | $31,722 | $8,032 | $23,690 |
| 20 | $46,610 | $7,467 | $39,143 |
Pros and Cons of SPY
Pros
- ✓The most liquid ETF in the world with massive daily trading volume, making it ideal for any trade size
- ✓Longest track record of any U.S. ETF, established in 1993
- ✓Extremely tight bid-ask spreads due to high liquidity
- ✓Extensive options market makes it versatile for various investment strategies
Cons
- ✗Higher expense ratio (0.0945%) compared to similar S&P 500 ETFs like VOO (0.03%)
- ✗Structured as a Unit Investment Trust, which prevents reinvestment of dividends between distribution dates
- ✗The higher cost adds up over decades for long-term buy-and-hold investors
SPY vs Similar ETFs
See how SPY stacks up against similar funds:
Frequently Asked Questions
Is SPY a good ETF for beginners?▾
SPY has a Beginner Suitability Score of 9/10 on our scale. This makes it a strong choice for new investors due to its low fees and broad diversification.
What is the expense ratio of SPY?▾
SPY has an expense ratio of 9.45%. This means for every $10,000 you invest, you pay approximately $945 per year in fees. This is considered very low and cost-efficient.
How much money do I need to invest in SPY?▾
You can invest in SPY with as little as $1 through brokers that offer fractional shares (like Fidelity, Schwab, or Robinhood). There is no minimum investment required beyond the share price itself, which changes daily. Dollar cost averaging — investing a fixed amount regularly — is a popular strategy.
Does SPY pay dividends?▾
Yes, SPY pays dividends with a current yield of approximately 1.20%. Dividends are typically paid quarterly and can be reinvested automatically through most brokers.
What are the top holdings in SPY?▾
The top holdings in SPY include Apple Inc. (7.20%), Microsoft Corp. (6.50%), NVIDIA Corp. (6.20%), and more. The fund holds 503 total positions, providing broad diversification across many companies.
What sectors does SPY invest in?▾
SPY's largest sector allocations are Information Technology (31.80%), Financials (13.30%), Health Care (11.70%). This sector distribution shows a focus on information technology stocks.
How much do SPY's fees cost over time?▾
With an expense ratio of 9.45%, a $10,000 investment in SPY would lose approximately $39,143 to fees over 20 years (assuming 8% annual returns). Consider whether the fund's strategy justifies these costs.