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.
One of the best ways to invest in the S&P 500 index from the UK is by using an exchange-traded fund (ETF). These funds let you invest in all the stocks within the index in a single investment.
The table below shows the best-performing S&P 500 ETFs available right now. There’s only slight changes in performance which largely comes down to when each ETF updates the stocks. All S&P 500 ETFs should contain an almost identical selection of stocks.
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 | 5-year performance (to Oct. ’24) | 1-year performance (to Oct. ’24) | Link to invest |
|---|---|---|---|---|
| Invesco S&P 500 (SPXP) |  | 102.69% | 25.73% | Capital at risk |
| Xtrackers S&P 500 Swap (XSPX) |  | 102.23% | 25.58% | Capital at risk |
| iShares Core S&P 500 (CSP1) |  | 100.49% | 25.49% | Capital at risk |
| HSBC S&P 500 (HSPX) |  | 88.57% | 24.02% | Capital at risk |
| Vanguard S&P 500 (VUSA) |  | 87.50% | 24.09% | Capital at risk |
| SPDR S&P 500 ETF (SPX5) |  | 87.45% | 24.02% | Capital at risk |
All investing should be regarded as longer term. The value of your investments can go up and down, and you may get back less than you invest. Past performance is no guarantee of future results. If you’re not sure which investments are right for you, please seek out a financial adviser. Capital at risk.
S&P 500 funds tend to be some of the most popular options for UK and investors, and also some of the best-performing ETFs over long periods of time. Rather than looking at slight discrepancies in performance, you’re better off looking for the cheapest S&P 500 index fund or ETF available on your chosen trading platform.
Because these funds are all copying the same index, there’s no reason you should pay higher fees. Cheap is often best when it comes to investing in passive S&P 500 tracker-funds. S&P 500 funds are passively managed (rather than actively managed), so you don’t get any added benefit by using a specific brand or fund.
It’s also going to be worthwhile ensuring your share dealing account charges low (or no) commission for investing in the S&P 500 through a fund.
There are 2 main ways to invest in the S&P 500 – the first is to buy shares in all 500 companies at the same weightings as they have in the index, then constantly keep up to date with changes to the index and rebalance your portfolio. This can be very time consuming and expensive.
The preferable option, which saves you time and money, is to invest in an S&P 500 fund (like an ETF). Essentially, someone else does the above for you and all you have to do is choose one to invest in. Here’s how to do it:
The whole process can take as little as 15 minutes. You’ll need a smartphone or computer, an internet connection, your passport or driving licence and a means of payment.
Some S&P 500 index funds and ETFs track the performance of all 500 S&P stocks, whereas others only track a certain number of stocks, or are weighted more towards specific stocks.
When you choose to invest in an S&P 500 fund, you’re not necessarily looking for the one that performs best. Each one aims to match the performance of the S&P 500 index, so they should all mirror the performance of the index pretty closely.
It’s usually best to compare funds based on the ongoing fees, which is measured by Total Expense Ratio (TER). The cheapest S&P 500 fund is the Invesco S&P 500 UCITS ETF, which has a 0.05% total expense ratio (TER). This means if you invested £1,000, you’d be charged 50p in annual fees each year.
While the performance of S&P 500 funds shouldn’t diverge too much, there are some that have performed slightly better than others over time. Also, investment companies need to pay royalties to have “S&P” in the title of its fund, some will avoid this by calling it something like the “US 500” fund.
The S&P 500 (Standard and Poor’s 500) is an index made up of 500 leading public companies in the US. The name comes from the merger of 2 financial data companies: Poor’s Publishing and the Standard Statistics Company.
The index contains some of the most recognisable companies in the world and when people talk about the “US stock market” they’re often referring to the S&P 500 because this has become a key measure of the US economy and gives a snapshot into its overall health.
The companies in the index are hand-picked by the US Index Committee. Contrary to popular belief, it’s not just the 500 biggest US stocks.
There’s some basic criteria to allow a company to be eligible to be part of the S&P 500:
Here are the top sectors that currently make up the bulk of the S&P 500 in terms of weighted exposure:
Our experts keep on top of the markets to bring you the latest on what's shaking up stock prices.
6 Novmeber 2024: S&P 500 futures have soared to record highs after Trump declared victory, bolstering the notion of the "Trump trade".
6 November 2024: As the US election results roll in, it's expected that the stock market and the S&P 500 index could experience some volatility during this period.
Yes! There are several ways you can invest in the S&P 500 from the UK. You can buy stocks in the companies that make up the S&P 500 or buy an index fund, mutual fund or ETF that tracks the overall performance of the S&P 500 index.
These trading apps allow you to invest in S&P 500 stocks directly, companies or invest in and S&P 500 funds (like an ETF).
There are more than 100 S&P 500 index funds and ETFs listed on the London Stock Exchange (LSE) that you can invest in from the UK, and you’ll have access to even more if you have an account with a trading platform or broker that offers direct access to the US stock market.
The S&P 500 tracks the performance of 500 leading companies on US stock exchanges, and it’s the most popular US stock index. The equivalent of the S&P 500 in the UK is the FTSE 100, which tracks the performance of the 100 largest companies on the London Stock Exchange.
Like the S&P 500, the FTSE 100 is also used as a general yardstick to measure the relative health and performance of the UK stock market and wider economy.
If you don’t want to invest in a fund then you can buy individual S&P 500 stocks.
If you choose to invest in all 500 stocks, you’ll find that it’s a very expensive method of investing as you may need to pay trading fees on every single share purchase. Some of the stocks in the S&P 500 are also valued in the hundreds of dollars, so you’d need to invest thousands of pounds in order to get exposure to all companies in the index.
If you’re looking to diversify your portfolio by investing in the companies in the S&P 500, it’s likely going to be a lot cheaper and more efficient to use an index fund or invest in an ETF that tracks the performance of the S&P 500.
We’re not going to bore you by listing all 500 stocks in the S&P 500. Instead, here are the current top 10 S&P 500 stocks by market cap (as of October 2024). With most S&P 500 funds, the bulk of your investment will go to these top holdings:
| Company | Ticker | Weighting |
|---|---|---|
 | AAPL | 6.92% |
 | MSFT | 6.5% |
 | NVDA | 6.16% |
 | AMZN | 3.43% |
 | META | 2.4% |
 | GOOGL | 2.01% |
 | BRK.B | 1.81% |
| GOOG | 1.94% |
 | LLY | 1.61% |
 | AVGO | 1.49% |
The S&P 500 features some of the largest and most successful companies in the world and has historically given investors a decent return on their investment. It’s one of the best (and simplest) ways to get exposure to the US economy as an investor.
If you only invest in stocks on the London Stock Exchange (LSE), you’ll be limiting your options. Investing in an S&P 500 index fund or accessing the US stock market to invest in stocks listed on the S&P 500 will help to diversify your portfolio internationally.
There are a couple of fees to keep in mind if you plan to invest in US stocks – the commission fee (the cost of carrying out the trade), and the foreign exchange or FX fee (which is the cost of changing your money over to US dollar). If you buy an S&P 500 fund that’s denominated in pounds, you won’t have to pay an FX fee. And if you use a 0% commission platform, you won’t have to pay a trading costs either.
But if you want to buy indiviual stocks in the S&P 500, here are some of the costs of buying US stocks with major brokers:
| Platform | Fee for a US trade | Foreign exchange fee |
|---|---|---|
| eToro | £0 | 0.75% |
| Freetrade | £0 | 0.99% |
| Hargreaves Lansdown | £11.95 | 1% |
| XTB | £0 | 0.5% |
| IG | £10 | 0.5% |
| Saxo | $1 | 0.25% |
| Trading 212 | £0 | 0.15% |
The most expensive part of buying US stocks is the foreign exchange fees. Compare the fees for the providers that have the lowest foreign exchange fee, even if they’re not commission free, to work out whether it might work out cheaper to go with another provider.
George Sweeney
The S&P 500 contains plenty of growth-oriented companies that tend to trade at higher multiples than other stocks. So many analysts who compare the S&P 500 to something like the FTSE 100 will tell you that the S&P 500 index is overvalued and will likely fall to a more reasonable level. This makes sense. The problem is that analysts have been saying this for years.
Although the flagship index from the US tends to see greater volatility and bigger falls when things turn sour, it’s also proven over long periods that it can make back lost ground (and then some), leaving other international markets in its dust. Unless the US becomes less important to the global economy, paying a premium to invest in many of its best stocks sounds reasonable.
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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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.
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