State Street SPDR S&P 500 ETF Trust (SPY)

The SPDR S&P 500 ETF Trust (SPY) is an exchange-traded fund that seeks to track the performance of the S&P 500 Index, the benchmark that measures 500 of the largest publicly traded companies in the United States. Launched by State Street Global Advisors in 1993, SPY was the first U.S.-listed ETF and remains one of the largest and most heavily traded ETFs in the world.

SPY gives investors diversified exposure to the U.S. large-cap equity market in a single security. Its low expense ratio makes it a cost-effective alternative to actively managed mutual funds, and its very high daily trading volume and tight bid-ask spreads make it a common choice for both long-term investors and active traders.

Because the fund is market-cap weighted like the index it follows, its largest holdings are the biggest U.S. companies, and the technology sector makes up the largest share of its assets, followed by sectors such as financials, communication services and healthcare.

Like any equity investment, SPY is subject to market risk: its value can fall with the overall stock market because of economic conditions, regulatory changes and other factors affecting the companies it holds.