Best S&P 500 ETFs for October 2024

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Nearly all exchange-traded funds track indexes — and index investing is a strategy that has proven its worth over the decades. Of all the indexes an ETF can mirror, the S&P 500 remains the standard-bearer benchmark for the overall stock market. 

It represents the 500 largest U.S.-based companies, which collectively account for roughly 80% of all available global market capitalization. As goes the S&P 500, so goes the stock market as a whole.

There was a time when investors would have had to buy individual shares of all 500 companies if they wanted to match the index’s performance. But today, a single share of a single ETF can buy modern investors exposure to every single one. That’s not the only way to invest in the S&P 500, though. Some investors want the benefits of investing in large S&P 500 companies but focus on segments of the index rather than the entire thing.

What Are the Best S&P 500 ETFs?

An ETF tracking the S&P 500 is a cornerstone for many investors, offering a passively managed, diversified investment. While core S&P 500 ETFs are designed to mirror the index, tactical ETFs focus on specific aspects of the index. These tactical ETFs may have higher expense ratios but can potentially offer better performance. Understanding these differences can help you choose the best ETF for your portfolio. Here are the top S&P 500 ETFs for October 2024:

• State Street SPDR S&P 500 ETF (SPY)
• Vanguard S&P 500 ETF (VOO)
• iShares Core S&P 500 ETF (IVV)
• State Street SPDR Portfolio (SPLG)
• Schwab S&P 500 Index Fund (SWPPX)
• Invesco S&P 500 Equal Weight ETF (RSP)
• SPDR Portfolio S&P 500 Growth ETF (SPYG)
• Vanguard S&P 500 Value ETF (VOOV)

1. State Street SPDR S&P 500 ETF (SPY)

• Expense ratio: 0.0945%

In January 1993, State Street started the ETF revolution when it debuted the SPDR S&P 500 ETF, history’s first U.S.-listed exchange-traded fund. Three decades later, the mother of the ETF movement remains the gold standard of S&P 500 index funds. 

SPY boasts one of the highest trading volumes and the largest assets under management, or AUM — not just among S&P 500 funds, but all ETFs. Like all S&P 500 ETFs, its holdings represent all 11 GICS sectors and roughly two dozen industries. Also, like the rest of the bunch, it pays a dividend that roughly mirrors the index — SPY’s 30-day SEC yield is currently 1.16%.

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2. Vanguard S&P 500 ETF (VOO)

• Expense ratio: 0.03%

Vanguard is the world’s second-biggest ETF provider of assets under management and ranks in the Top 10 for the number of funds provided with 86. Even more important than its size is Vanguard’s unique ownership structure.

In 1975, Vanguard disrupted the industry with a new model giving the reins not to outside investors, but to its shareholders. The company is owned by its funds, the people who buy them. The model — which Vanguard says lowers expenses and eliminates conflicts of interest — remains unique in the asset-management industry.

3. iShares Core S&P 500 ETF (IVV)

• Expense ratio: 0.03%

SPY and VOO are probably the two most recognizable names in the S&P 500 ETF game — but they’re hardly alone. No investment firm in the world is bigger than BlackRock, and its iShares family of ETFs is among the world’s biggest and most trusted family of funds. 

With a history dating back to March 2000, IVV is one of the oldest funds and has the second-highest AUM. Like VOO, it closely mirrors SPY.

4. State Street SPDR Portfolio (SPLG)

• Expense ratio: 0.02%

SPLG holds the same 503 companies as State Street’s flagship ETF. The difference is in liquidity — SPLG has far less AUM and a much lower trading volume than SPY.

For investors, those factors translate into much lower costs, both in the purchase price and long-term ownership expenses. SPLG currently trades for around $67 per share compared to SPY, which trades for about 8.5 times more at $569.94 per share. It also reduces the expense ratio by a third, from nearly 0.1% to a minuscule 0.02%.

5. Schwab S&P 500 Index Fund (SWPPX)

• Expense ratio: 0.02%

First listed in 1997, Schwab’s offering has one of the longest tenures on the market — but it stands out for another reason. Its expense ratio beats nearly every fund money can buy — index investors can’t get much closer to free than 0.02%.

6. Invesco S&P 500 Equal Weight ETF (RSP)

• Expense ratio: 0.20%

The S&P 500 index weights companies by market capitalization, so the largest — Apple, which comprises 7.12% of the portfolio — has much more influence than the smallest — News Corporation, which makes up just 0.01%. Equal-weight funds like Invesco’s RSP give each stock equal weight.

Although BlackRock also has an equal-weight S&P 500 ETF with the same expense ratio as RSP, it was introduced just last year, so it doesn’t have RSP’s track record.

7. SPDR Portfolio S&P 500 Growth ETF (SPYG)

• Expense ratio: 0.04%

SPDR’s SPYG is among the past year’s best-performing S&P 500 Growth Index ETFs, and it’s also significantly less expensive than Vanguard and BlackRock, which have expense ratios of 0.10% and 0.18%, respectively.

The S&P Growth Index selects S&P 500 stocks that appear poised for growth based on sales growth, earnings change relative to price and momentum, or price change.

8. Vanguard S&P 500 Value ETF (VOOV)

• Expense ratio: 0.10%

Vanguard’s VOOV ETF isn’t the cheapest S&P 500 value ETF, but its expense ratio is lower than iShares’ version, and the performance is comparable.

Unlike some ETF portfolios, which are balanced quarterly, it’s balanced just once yearly, in December. It includes those S&P 500 stocks displaying value characteristics like favorable book-value-to-price ratio, earnings-to-price ratio and sales-to-price ratio.

What Is the Cheapest S&P 500 ETF?

The cheapest ETF has the lowest expense ratio, which is the fee investors pay for portfolio management. Since they’re passively managed, ETFs typically have much lower expense ratios than traditional actively managed mutual funds — but pinch your pennies because those fees add up over time. 

A 0.5% expense ratio fund charges $50 for every $10,000 invested. On the other hand, an ETF with a 0.03% expense ratio charges just $3 for every $10,000 invested. 

How To Choose an S&P 500 ETF

ETFs aren’t created equal, even following the same benchmark index. So how do you choose the best one for you?

• Pick a strategy: Are you looking for a core holding to keep in your portfolio indefinitely, or are you looking to customize your portfolio with stocks representing a segment of the S&P 500?
• Research funds consistent with your chosen strategy: For core S&P 500 ETFs you might search “total S&P 500 Index ETFs.” For growth ETFs, search “S&P 500 growth ETFs.”
• Compare expense ratios: Expense ratios aren’t the only consideration when choosing an index ETF, but they should be at the top of the list.
• Compare holdings: Some ETFs hold all the stocks in the index they track. Others might invest in a representative sample.
• Compare performance: Look at the funds’ recent performance and their performance over three, five and 10 years to get the most accurate comparison.

How To Invest In S&P 500 ETFs

You can invest in ETFs yourself, through a self-directed investment account at a brokerage such as Vanguard, Fidelity or Schwab. You’ll be able to search a list of the ETFs your brokerage offers. Or search a specific one if you already know which you want to invest in.

Once you’ve researched the options and selected the ETF you want to purchase, place an order by clicking a “Buy” or “Trade” button on the ETF’s listing on the brokerage site.

Core ETFs vs. Tactical ETFs — What’s the Difference?

Core S&P 500 ETFs are the funds most people think of when they hear the term “index fund.” These are the ETFs that track the overall S&P 500. Investors typically buy them as long-term investments. They’re relatively simple investments because they require little individual decision-making. You’re investing in the overall market and not just an individual sector.

Core ETFs serve as a portfolio’s backbone. Once you have one in place, you can invest in more narrowly focused S&P 500 ETFs to round out your holdings.

Those narrow ETFs track a segment or sector of the S&P 500. They’re called tactical ETFs because you can use them to customize and nudge the balance of your portfolio as needed to address specific investment goals and preferences or in response to current market trends. For example, you might select an ETF that only invests in S&P 500 stocks that earn dividends or are primed for growth — about half of those on the index.

Investors often hold tactical ETFs in the short or medium term.

Final Take

The biggest S&P 500 ETFs mirror the performance of the underlying index — but many available variations offer opportunities to target specific niches within the index. However, they typically come with higher expense ratios and greater volatility, so it’s important to weigh the risks before you invest.

Melanie Grafil and Daria Uhlig contributed to the reporting for this article.

Methodology: GOBankingRates reviewed expense ratio and performance data for S&P 500 ETFs, and selected those that compared most favorably.

Data is accurate as of Sept. 26, 2024, and is subject to change.

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