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The SPY is an ETF. This is the broad name for a kind of security that aggregates or tracks multiple stocks within an index, industry, or another grouping. SPDRs are a specific type of ETF issued by State Street Global Advisors that tracks a certain index, such as the S&P 500. While ETFs may trade like ordinary shares of stock, they represent a portfolio of stocks and not just one company.<\/p>" } } , { "@type": "Question", "name": "What Does SPDR Stand for?", "acceptedAnswer": { "@type": "Answer", "text": "

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Yes. The SPY ETF diversifies exposure<\/a> to the U.S. equity market and is suitable for investors willing to take on a moderate level of risk. Since it tracks the S&P 500 Index, it is often a suitable choice for those seeking passive index investing.<\/p>" } } ] } ] } ]

Understanding SPY ETF: Insights Into SPDR S&P 500 ETF Trust Holdings

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Updated October 16, 2025
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Launched in January 1993, the SPDR S&P 500 ETF Trust was the first ETF listed on an exchange and is among the most popular. It tracks the Standard & Poor’s (S&P) 500 Index, which comprises 500 large-cap U.S. stocks and is a bellwether for the financial health and stability of the economy. The index's stocks are selected by a committee based on market size, liquidity, and industry. A major portion of the SPY ETF is invested in the information technology sector. It has generated an average annual return of just over 10% since its inception.

Key Takeaways

  • The SPDR S&P 500 ETF Trust (SPY) tracks the S&P 500 Index which consists of 500 large-cap U.S. stocks.
  • SPY, established and listed in 1993, was the first index ETF on U.S. exchanges and remains highly traded.
  • The fund's assets have grown to over $570 billion, with a significant portion in information technology.
  • SPY's expense ratio is higher than some rival S&P 500 ETFs, like those offered by Vanguard.
  • SPY provides investors diversified exposure to U.S. equities, though it carries multiple market-related risks.

What Makes the SPY ETF Unique

As noted above, the SPY ETF was established on Jan. 22, 1993. It is an ETF that tracks the S&P 500. It is often regarded as the first ETF to be listed and remains one of the most actively traded, even with the advent of competing S&P 500 ETFs. It is considered to be the original fund to track the S&P 500.

The ETF had just $6.53 million in assets under management (AUM) when it launched. After a rough start and some initial difficulty finding investors, it soared to more than $1 billion in AUM three years later. The ETF trust's total assets are now over $570 billion.

SPY is listed on the New York Stock Exchange’s (NYSE) Arca exchange, and investors can trade this ETF on multiple platforms. The trustee of the SPDR S&P 500 ETF Trust is State Street Bank and Trust, and its distributor is ALPS Distributors. Because ETF shares trade just like stocks, investors can buy and sell SPY shares via their broker throughout the day, including selling them short.

The price of a share of SPY is intended to be one-tenth that of the S&P 500 Index. So, if the S&P is at a level of 4,000, then one SPY share should trade at close to $400.

Fast Fact

SPY turned 31 on Jan. 22, 2024, celebrating the milestone by remaining the largest ETF tracking the S&P 500 Index.

SPY ETF's Investment Structure and Fee Insights

Because of its relative age, the ETF is constructed as a unit investment trust (UIT). This means it's a fixed portfolio that forms units that can be created and redeemed with the issuer. Because of this structure, the SPY fully replicates the S&P 500 Index, holding all members of the underlying index at their target weights.

The SPY and other index ETFs provide investors a way to own the entire index by owning a single security for a low expense ratio. SPY's expense ratio is not the lowest among other ETFs that track the S&P 500 Index. It's greater than Vanguard S&P 500 ETF (VOO)’s expense ratio. Keep in mind that these fees do not include any broker fees or commissions.

Important

Several ETFs track the S&P 500 Index. Investors looking at such an ETF should consider the expense ratio, tracking error, and liquidity of the ETF before choosing one in which to invest.

Key Sectors and Stocks in the SPY ETF

The SPY is a well-diversified basket of assets, which allocates its holdings across multiple sectors. The top five sectors as of Sept. 25, 2024, were:

  • Information Technology
  • Financials
  • Healthcare
  • Consumer Discretionary
  • Communication Services

The SPDR S&P 500 ETF Trust allocates almost all of its funds to common stocks, which are included in the S&P 500 Index. Its top 10 holdings are in the following companies:

SPY ETF’s Top 10 Holdings (as of Sept. 25, 2024)
Holding (Company)
Apple (AAPL)
Microsoft (MSFT)
NVIDIA (NVDA)
Amazon (AMZN)
Alphabet Class A (GOOGL)
Meta Platforms—Class A (META)
Alphabet Class C (GOOG) 
Berkshire Hathaway Class B (BRK.B)
Eli Lilly (LLY)
Broadcom (AVGO)
Source: State Street Global Advisors

Celebrating 30 Years of SPY ETF: Historical Insights and Trends

The SPY celebrated its 31st birthday on Jan. 22, 2024. It remains the preeminent S&P 500 ETF despite having higher management fees compared to its younger rivals. While the SPY wasn’t a new strategy when it launched in 1993, it provided a revolutionary way to invest by trading similarly to a stock on an exchange.

Apart from a first-mover advantage, several factors have cemented the SPY’s longevity:

  • The fund has benefited from a growing transition to passive investment management. Although active management funds have taken the lion’s share of net inflows over much of the last 30 years, that trend switched in 2018. Passive funds overtook the market, beating out investment in active funds.
  • The S&P’s stellar performance, driven by large-cap technology stocks in the mid-to-late 1990s and after the Great Recession, helped the SPY to continue to attract further inflows. From 1995 to 1999, the blue-chip index gained an average of about 28% per year, while from 2009 to 2023, it gained more than 400%.

The ETF’s massive asset base, coupled with a multibillion average daily trading volume (ADTV), makes the fund popular with investors who want cost-effective exposure to the S&P 500 and traders who seek deep liquidity. The SPY’s broad appeal assures that it will remain at the forefront of financial markets for the foreseeable future.

Is SPY a Stock or Exchange-Traded Fund?

The SPY is an ETF. This is the broad name for a kind of security that aggregates or tracks multiple stocks within an index, industry, or another grouping. SPDRs are a specific type of ETF issued by State Street Global Advisors that tracks a certain index, such as the S&P 500. While ETFs may trade like ordinary shares of stock, they represent a portfolio of stocks and not just one company.

What Does SPDR Stand for?

SPDR stands for Standard & Poor’s Depositary Receipt. SPDR ETFs have a fixed number of shares that are exchanged and traded like stocks on the open market.

Is the SPDR S&P 500 ETF Trust a Good Investment?

Yes. The SPY ETF diversifies exposure to the U.S. equity market and is suitable for investors willing to take on a moderate level of risk. Since it tracks the S&P 500 Index, it is often a suitable choice for those seeking passive index investing.

The Bottom Line

The SPDR S&P 500 ETF Trust offers investors an efficient way to diversify their exposure to the U.S. equity market without having to invest in multiple stocks. Therefore, the SPY is suitable for any investors who want to include U.S. equities in their portfolio while taking on only a moderate level of risk.

That being said, since the SPDR S&P 500 ETF Trust tracks 500 large-cap stocks in the United States, it carries various risks, such as market risk, country risk, currency risk, economic risk, and interest rate risk. Investors should be aware of both world and U.S. economic data, which could affect the performance of the fund.

Article Sources
Investopedia requires writers to use primary sources to support their work. These include white papers, government data, original reporting, and interviews with industry experts. We also reference original research from other reputable publishers where appropriate. You can learn more about the standards we follow in producing accurate, unbiased content in our editorial policy.

  1. Fidelity Investments. "SPDR S&P 500 ETF Trust: Overview."

  2. U.S. Securities and Exchange Commission. "SPY: The Idea That Spawned An Industry."

  3. VettaFi. "S&P 500 Index (INDEXSP INX) – ETF Tracker."

  4. State Street Global Advisors. “SPDR® S&P 500® ETF Trust (SPY).”

  5. U.S. Securities and Exchange Commission. “Spiders (SPDRs).”

  6. Vanguard. “Vanguard S&P 500 ETF (VOO).”

  7. S&P 500 Data. "Stock Market Returns Between 1995 and 1999."

  8. S&P 500 Data. "Stock Market Returns Between 2009 and 2023."

  9. Market Chameleon. "SPY."

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