The S&P 500 is a stock market index compiled and published by Standard & Poor’s (S&P), consisting of 500 common stocks selected based on company size, liquidity, and industry representation. It is one of the most widely used benchmark indices in the U.S. stock market.
The S&P 500 index includes the following sector-based sub-indices:
- Industrial Stocks (400 stocks)
- Transportation Stocks (20 stocks)
- Utility Stocks (40 stocks)
- Financial Stocks (40 stocks)
The composite of these sub-indices forms the S&P 500 Index.
Similar to the Dow Jones Industrial Average, the S&P 500 tracks U.S. stocks listed on the New York Stock Exchange (NYSE). However, it differs in that it includes 500 companies instead of just 30, making it a market capitalization-weighted index.
Because the index considers all 500 stocks in its calculation, it provides a better overall market trend than the Dow Jones Industrial Average, which tracks only a few companies. This makes the S&P 500 more representative of the market as a whole. However, it also has some downsides:
- The index is heavily influenced by large-cap stocks.
- The actual stock price movements perceived by individual investors may differ from the index fluctuations.
Despite these challenges, investing in the S&P 500 allows for diversified exposure to major companies like Apple, Microsoft, Google, Facebook, and Amazon, making it an ideal choice for beginner investors like myself.
KODEX U.S. S&P 500 Futures (H) ETF
The KODEX U.S. S&P 500 Futures (H) ETF is an ETF (Exchange-Traded Fund) offered by Samsung Asset Management, tracking the performance of S&P 500 futures.
- It has shown a steady upward trend in returns.
- The management fee is relatively low at 0.25%.
- The market capitalization is 50 billion KRW, and while trading volume is currently low, it is expected to increase as the ETF gains more traction.
Overall, this ETF presents a cost-effective way to invest in the S&P 500 and is a great option for long-term investors
