SPY ETF or the SPDR S&P 500 ETF Trust, is one of the favorite funds of investors. SPY aims to replicate the S&P (Standard & Poor’s) 500 Index. This index includes 500 large-cap stocks from the US. The stocks get selected by a committee and it has to meet certain requirements in market size, liquidity and industry.
The S&P 500 is used as one of the main bear/bull market indicators in US equities and tells us the general financial health and stability of the economy.
The stock ticker SPY is an exchange-traded fund (ETF) that’s used to track the S&P 500 Index. It’s said to be the first ETF to be listed and it’s still heavily traded even with several competing ETFs.
With a rough start and problems finding investors, SPY was introduced in 1993 with $6.53 million in assets to start. After only three years it sky-rocketed to $1 billion in assets under management (AUM), with $340.8 billion in assets as of October 6, 2022.
Investors can trade SPY on multiple platforms because SPY is listed on the New York Stock Exchange’s. State Street Bank and Trust Co. are the trustees of SPDR S&P 500 ETF. The distributor is ALPS Distributors Inc. ETF shares are very similar to stocks in a way that they can be bought and sold via a broker during the day. This includes shorting them.
SPY achieves to be close to 1/10 of the S&P 500 Index. If the level of S&P is at 4,500, SPY will be trading closely to $450.
SPY is a unit investment trust (UIT). The issuer creates and redeems the forms units in the fixed portfolio. This structure helps SPY replicate the S&P 500 Index, keeping all the members of the index proportionally.
SPY and other ETFs give investors the possibility of owning the entire index by owning a single security for a low cost. With an expense ratio of 0.0945% as of October 06, 2022, SPY doesn’t have the lowest among other ETFs that track the S&P 500 Index. Vanguard has a ratio of 0.03%, three times lower that of SPY. You still need to pay any broker fees or commissions.
As of October 6, 2022, SPY pays a yield of 1.65%
SPY is an ETF. This stands for exchange-traded fund (ETF). An ETF is a security that tracks the performance of multiple stocks in a particular index, industry or other group.
SPY is a particular ETF issued by the State Street Global Advisors that tracks S&P 500.
SPY trades like a normal stock but it represents a portfolio of stocks and not a company.
Standard & Poor’s Depositary Receipt. SPY has a specific amount of shares that traded and exchanged like regular stocks in the stock market.
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