S&P500 closed at Record High! Which ETF to Invest?

🌟🌟🌟What an amazing week it has been! The S&P 500 Index  closed at Record High on Friday, November 8 at 5995.54 as the US markets celebrate Donald Trump 's stunning win in the US Presidential Election.

I am so happy that SPLG$SPDR Portfolio S&P 500 ETF(SPLG)$  also closed at Record High too at USD 70.37.   SPLG ETF seeks to track the performance of the S&P500.  This ETF is a low cost version of $SPDR S&P 500 ETF Trust(SPY)$ .  Both ETFs are managed by State Street Global Fund Managers.  

The S&P500 is designed to measure the performance of the large cap segment of the US stock market, representing about 80% of the US market. 

SPLG has  the lowest Expense ratio among competing ETFs with only 0.02%.  In contrast SPY expense ratio is 0.09% while Vanguard VOO $Vanguard S&P 500 ETF(VOO)$   expense ratio is 0.03%.

The Top 10 holdings include $NVIDIA Corp(NVDA)$  $Apple(AAPL)$  $Microsoft(MSFT)$  Amazon, Meta Platforms, Alphabet Class A & Class C, Broadcom, Berkshire Hathaway and Tesla. 

The Top 10 holdings weightage is 35%.  Total number of holdings is 503.  Dividends are paid every 3 months.  The current dividend yield is 1.23%.  SPLG goes ex dividend on December 27 2024.

I choose to invest in SPLG as it is a low cost way to gain access to the best and strongest US companies.  These include the Magnificent 7 companies which have played a pivotal role in the performance of the S&P500 Index. 

A low expense ratio is also an important factor as it puts more money back into my pockets.  At just 0.02%, it is the lowest  expense ratio I have ever found. 

SPLG also does the heavy lifting for me in choosing the best performing companies and weeding out the non performing ones. 

However SPY is still the most popular ETF among the Big Institutions and expert traders due to its liquidity. SPY is also the largest ETF with Assets Under Management of USD 539.93 billion.  In contrast SPLG's Assets Under Management is USD 51.068 billion.   

But since  my goal is to buy and hold, I prefer SPLG for its low expense ratio and lower entry point.  At the last closing price of USD 70.37, it is a lot cheaper than SPY's closing price of USD 598.19 or VOO's price of USD 549.95.

Warren Buffett, the Oracle of Omaha has said that most people are better off with Index Funds.    In fact in 2008, Warren Buffett had famously bet USD 1 million that an S&P 500 Index Fund could beat a group of hedge funds over 10 years.  The 5 hedge funds averaged returns of around 36% in that time while Warren Buffett's S&P 500 fund earned nearly 126% returns.  Even the highest earnings hedge fund only earned total returns of just under 88% in total. 

I have been dollar cost averaging into SPLG over the last 3 years and the results at 36% capital growth speak for themselves.   There is no need to choose which stock to buy.  No need to read company reports.  Just simply dollar cost averaging into SPLG. 

So investing does not have to be complicated.  Just buy and hold SPLG and reap the rewards long term.  

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