SPDR S&P 500 ETF Trust (NYSEMKT:SPY) Share Price News | The Motley Fool Australia https://www.fool.com.au/tickers/nysemkt-spy/ Since 1993, millions of investors have trusted The Motley Fool for simple, down-to-earth investing research. Thu, 19 Mar 2026 01:31:04 +0000 en-AU hourly 1 https://wordpress.org/?v=6.9.4 https://staging.www.fool.com.au/wp-content/uploads/2020/06/cropped-cap-icon-freesite-96x96.png SPDR S&P 500 ETF Trust (NYSEMKT:SPY) Share Price News | The Motley Fool Australia https://www.fool.com.au/tickers/nysemkt-spy/ 32 32 The only 2 index funds in Warren Buffett's portfolio — and how they could make you money https://staging.www.fool.com.au/2022/11/07/the-only-2-index-funds-in-warren-buffetts-portfolio-and-how-they-could-make-you-money-usfeed/ Mon, 07 Nov 2022 05:30:00 +0000 https://www.fool.com/investing/2022/11/06/index-funds-warren-buffett-portfolio-make-money/ Buffett highly recommends owning S&P 500 index funds. And he practices what he preaches with these two.

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]]> This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Warren Buffett is a firm believer in index funds. In fact, in his 2013 letter to Berkshire Hathaway (NYSE: BRK.A) (NYSE: BRK.B) shareholders, he wrote that his will recommends that most of the cash that goes to his family be put in a low-cost S&P 500 index fund. But does Buffett own any index funds himself? The answer is yes. Here are the only two index funds in Buffett's portfolio -- and how they could make you money.

Buffett's only index funds

Berkshire's portfolio includes around 50 individual stocks. It also includes a couple of very similar index funds -- the SPDR S&P 500 ETF Trust (NYSEMKT: SPY) and the Vanguard 500 Index Fund ETF (NYSEMKT: VOO). The SPDR S&P 500 ETF Trust, or SPY for short, is run by State Street. It was the first exchange-traded fund (ETF) listed in the U.S. SPY currently has roughly $360 billion in assets under management. Its annual expense ratio is 0.0945%. The Vanguard 500 Index Fund ETF, or VOO, as its name indicates, is operated by The Vanguard Group. Vanguard was a pioneer of mutual funds years ago. The company launched VOO in 2010. The ETF now has around $686 billion in assets under management. Its annual expense ratio is a super-low 0.03%.  Both of these ETFs attempt to track the S&P 500 index. Unsurprisingly, their holdings are nearly identical. So are their historical performances.

How they can make you money

Investing in SPY and VOO makes you a partial owner of the 500 biggest companies that trade on major U.S. stock exchanges. You'll own stakes in companies such as Apple, Microsoft, Amazon, and Buffett's own Berkshire Hathaway.  All of these companies work continually to generate more profits for their shareholders. That means they're trying to make you money. Many of them even pay you to own them by distributing regular dividends. These dividends are very important over time. Since SPY's inception in 1993, nearly half of its total return has come from dividend payouts.  Buffett wrote in that 2013 letter to Berkshire shareholders:
The goal of the non-professional [investor] should not be to pick winners -- neither he nor his "helpers" [professional investment managers] can do that -- but should rather be to own a cross-section of businesses that in aggregate are bound to do well. A low-cost S&P 500 index fund will achieve this goal.
That's still great advice. And, in a sense, the S&P 500 index funds pick winners for you. SPY and VOO automatically weed out the worst companies. If a company doesn't grow as quickly as its peers, it could eventually fall out of the S&P 500 index (and thus out of the ETFs' holdings). Buying and holding SPY and VOO pays off over the long run. SPY has delivered an average annual return of 9.35% since 1993. VOO (which didn't exist during the steep market downturns in the first decade of this century) has delivered an average annual return of 13.1% since 2010.

The timing is good

But should you buy these S&P 500 index funds now with a bear market underway? Actually, yes. Buffett's advice would almost certainly be in favor of buying either of these two ETFs. He told CNBC in 2018, "The best chance to deploy capital is when things are down." And, of course, there's one of the legendary investor's most famous quotes to "be fearful when others are greedy and to be greedy only when others are fearful." Granted, you won't be able to beat the market with SPY and VOO since they essentially reflect the overall market performance. For most investors, that's not a problem. If you're one of the exceptions, though, you can always follow in Buffett's footsteps. Even though the multibillionaire is a big fan of index funds, he still loves to buy high-quality stocks at reasonable prices. 

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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]]> Investing in this ETF right now could make you a millionaire retiree https://staging.www.fool.com.au/2022/09/26/investing-in-this-etf-right-now-could-make-you-a-millionaire-retiree-usfeed/ Mon, 26 Sep 2022 04:45:00 +0000 https://www.fool.com/investing/2022/09/25/investing-in-this-etf-right-now-could-make-you-a-m/ When it comes to building wealth over time, it's hard to beat a strategy of dollar-cost averaging into a broad index fund.

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]]> This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

With the market down substantially from its all-time highs, the benefits of dollar-cost averaging into a low-cost, broad-based stock index fund are becoming quite clear. By making regular investments every payday in this market, each dollar you're investing buys that many more shares while stocks are down. That may not seem like much benefit now, but it means you've got that many more shares available to compound in any recovery that follows.

It's with that backdrop that making regular investments in the SPDR S&P 500 ETF Trust (NYSEMKT: SPY) starting now could make you a millionaire retiree. It's a process that takes time no matter what the market is doing, which is a great reason to consider starting those investments now, even if the market continues to fall.

Why invest in the SPDR S&P 500 ETF Trust?

The SPDR S&P 500 ETF Trust is a low-cost index ETF that attempts to track the S&P 500 index, which is often used as a proxy for the overall US stock market. With itd expense ratio of 0.09%, investors in that ETF can get returns that nearly perfectly match that index, while losing almost nothing to fund management fees.

That combination of stock market like returns with very low internal costs makes the SPDR S&P 500 ETF trust a simple, one-stop shop for investors. It's especially potent for investors who don't want or are otherwise unable to put a lot of time and effort into digging through financial reports to pick individual stocks. When you add the fact that index investing tends to beat funds managed by Wall Street's best and brightest over time, the SPDR S&P 500 ETF Trust become an even more compelling option.

How long will it take to become a millionaire?

The path from $0 to $1 million depends heavily on two key factors: how much you're able to invest every month and what rate of return you earn along the way. The good news is that if you've got a long enough time horizon, reaching millionaire status by retirement age is feasible, even for people with modest incomes.

The following table shows how many years it takes to reach that millionaire status, depending on what you can save each month and what annual rate of return you earn along the way.

Monthly Investment10% Annual Returns8% Annual Returns6% Annual Returns4% Annual Returns
$2,20015.717.519.823.1
$2,00016.518.420.924.6
$1,50018.921.324.529.3
$1,00022.425.529.936.7
$50028.833.440.151.0
$30033.739.448.062.5

Data source: author.

The top end of that savings rate -- $2,200 per month -- represents a savings rate that can be contributed to tax-advantaged, retirement-focused accounts for most people. Workers under age 50 can generally contribute up to $20,500 per year in a company-sponsored retirement plan like a 401(k). They can also typically sock away up to $6,000 per year in their own IRA.  (The contribution limits are even higher for workers ages 50 and up. )

The bottom end of that savings rate -- $300 per month -- works out to around $10 per day. Even at that savings level, as long as you invest consistently throughout the length of a typical working career, you've got a decent shot at reaching millionaire status by the time you retire.

Get started now

Regardless of where you are in your career, you'll never again have more time before you retire than you do right now. That makes today a great day to get your plan in place. The sooner you get started, the more of the cells in that table will be within your reach, improving your chances of retiring a millionaire.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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