InvestorQ : What are SPY ETF and one should invest in it?
Priyanka Singh made post

What are SPY ETF and one should invest in it?

Answer
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Shivali Sharma answered.
2 weeks ago


It is one of the most popular funds that aim to track the Index of Standard & Poor 500, which comprises of 500 large-cap and mid-cap US stocks. These stocks are selected based on different parameters such as market size, liquidity, and industry, etc. This is a security designed to purchase a fixed portfolio of assets.

The SPY is a well-diversified bucket of assets which allocates its assets to multiple sectors, such as 14.08% financial services, 10.74% communication services, 8.92% industrials, 8.13% consumer defensive, 21.30% information technology, 9.66% consumer cyclical, 3.25% real estate and 3.62% utilities.

SPY’s returns have crossed the average return of other large blend funds in the last 10 years. It has a lower expense ratio of 0.095%.

Should you invest?

If you are an investor looking for exposure in the U.S. market without wanting to invest in multiple stocks, this can be a good option for you. This is generally suitable for investors who are willing to take moderate risk and want exposure to US markets. Since this stock tracks mid and large-cap of only US markets, it has risk associated with it which includes country risk, currency risk, economic risk, etc.