The S&P 500 is the most famous stock index in the world. So much so that when people refer to the US stock market, they’re usually talking about this index. It’s a mammoth collection of some of the best companies in the world and it’s now easier than ever to invest in the S&P 500 from the UK.
Key takeaways
- The S&P 500 index is made up of 500 of the biggest and best companies in the US.
- You can invest in individual companies or a “fund” that tracks the S&P (see best performers).
- Watch out for any ongoing fees, usually referred to as “TER” – aim for as little as possible.
S&P 500 ETFs
One of the best ways to invest in the S&P 500 index from the UK is with an exchange-traded fund (ETF). These let you invest in all 500 stocks in a single investment. Here are the best-performing ETFs.
Note: We’ve added a link next to each of these funds, which takes you to a share trading app where you can sign up to invest in that S&P 500 fund.
ETF | Icon | 1-year performance (to Jan. '25) | 5-year performance (to Jan. '25) | Link |
---|---|---|---|---|
Invesco S&P 500 ETF (SPXP) | 29.57% | 108.13% | Invest Invest Capital at risk | |
Xtrackers S&P 500 Swap ETF 1C (XSPX) | 29.50% | 107.59% | Invest Invest Capital at risk | |
HSBC S&P 500 ETF (HSPX) | 29.44% | 106.37% | Invest Invest Capital at risk | |
iShares Core S&P 500 ETF USD (Acc) (CSP1) | 29.41% | 105.95% | Invest Invest Capital at risk | |
SPDR® S&P 500 ETF (SPX5) | 29.35% | 105.53% | Invest Invest Capital at risk | |
Vanguard S&P 500 ETF (VUSA) | 28.85% | 108.33% | Invest Invest Capital at risk |
Pros and cons of investing in the S&P 500
Pros
- Access some of the largest US stocks
- Investing in the index provides a degree of automatic diversification
- You can invest with ETFs and funds
- By tracking an index rather than actively picking stocks, you can invest passively which is often cheaper
Cons
- Not completely diversified — it only includes US stocks
- Foreign exchange (FX) fees might apply if you buy individual S&P 500 stocks
- Market cap weighting means most of your investment goes to the top stocks
- You get no control over the investments in an S&P 500 fund
The September effect
New research from personal finance comparison site Finder shows that September is a universally bad time for the stock market, no matter where you are in the world. Across 4 major global stock market indices, September was far and away the worst-performing month over the past 50 years.
You can see the average performance of the S&P 500 in different months of the year in the chart below with the average returns or losses taken from every year since 1973. You can also compare this with the FTSE 100, Euro Stoxx 50 and Nikkei 22 by click through the charts below.
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Bottom line
Home to Nvidia, Amazon, Apple, Tesla, and much more – the S&P 500 is made up of top US companies. It’s understandable why investors want to get a piece of the action. Take some time to consider how you want to invest – are there specific S&P 500 stocks you want to buy, or are you looking to diversify with an S&P 500 index fund or ETF?
Make sure you consider the costs of investing in US stocks, as there will likely be a foreign exchange (FX) fee on top of any commission. If you buy an S&P 500 fund or ETF in GBP denomination, you can avoid this. Investing in the S&P 500 is a decenture to the US stock market with a single investment, but remember to think about how this fits in with the rest of your portfolio.
Latest news on global markets
S&P 500 reaches 5-month high as tech shares rally
The S&P 500 gains off the back of Meta, Apple, Amazon and Alphabet’s latest results.
Read more…S&P 500 snaps winning streak ahead of the next Fed update
Stocks snapped a strong January rally as investors look towards a busy week on the market.
Read more…S&P 500 rises on strong GDP figures
US stocks rose as investors shake off fears of a recession during Thursday’s trading period.
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