S and P 500 ETF

The American S&P 500 index is perhaps slightly less known than the famous Dow Jones index but in other areas the S&P 500 outperforms the Dow Jones. It is a much wider spread index and it is more significant for investors than the Dow Jones index.

Within the S&P index you will find 500 large companies based in the United States. There are a number of rules companies have to comply with to be allowed into the S&P 500 index but the main rule is market capitalization.

Put in other words, they only want to include the largest publicly traded US companies. The S&P 500 is a weighted index based upon market capitalization. An important asset of the S&P 500 is the wide spread among all major market sectors.

Geographically speaking the S&P 500 also offers a very wide spread as you will find all major American multinationals included as well as some smaller companies whose main market is the US itself.

Some people wrongly think that a certain company either is tracked by the S&P 500 or by the Dow Jones. That is not the case, usually all companies included in the Dow Jones are also included in the S&P 500.

Investors that choose to invest in the United States through an ETF often prefer the S&P 500, so you will find large turnovers in ETF’s trading the S&P. 

Vanguard S&P 500 UCITS ETF

I myself have opted for the Vanguard S&P 500 UCITS ETF as this particular ETF also trades in Euro’s and even has a quotation on the Amsterdam Stock Exchange.

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