Why You Can Do Better Than the SPDR S&P 500 ETF Trust

SPDR S & P 500 ETF TRUST (NYSEMKT: Spy) It will always be a special place in the history of Wall Street. This is because the ETF is the first of its kind. But the ETF market has changed dramatically over the years, and today, investors can do better than the leading SPDR in ETF.

Here’s the reason – and look at a few more attractive alternatives.

Without going into the details of the reason why the boxes circulated on the stock exchange are an innovative investment tool, you can easily explain what this SPDR ETF does. Buy stocks in S & P 500 index (Snpindex: ^Gspc). The index box is not a unique thing, and it was not unique when ETF was presented to the world. What was different was the ability to trade SPDR S&P 500 ETF TRUST throughout the day.

Unlike index -based investment funds, which have been present for years, traded investment funds are traded like stocks. This increases the flexibility that investors enjoy with their portfolios. It also opens all other types of investment tactics, such as short strategies and options, around ETF. In this way, the SPDR S & P 500 ETF TRUST represents a revolutionary change in Wall Street.

However, on its essence, the SPDR S&P 500 ETF TRUST is still just an index box that tracks the S&P 500 index. On an absolute basis, a somewhat low -cost method remains to do so as well, with only 0.09 % expenses. On a relative basis, however, this is actually a kind of expensive price today.

The low costs offered by the exchanged funds on the stock exchange attracted a large number of investors. Since many traded investment boxes do nothing more than tracking similar indexes, in the meantime, one of the best ways to distinguish between ETF is to provide lower costs. This has led to a race to the percentage of lower expenses with regard to widespread follow -up indexes. The S& P 500 index may be the most widely followed index in the world, and there are many different options for investors if they want to invest in it.

For example, Vanguard S & P 500 ETF (nysemkt: vo) It also tracks the S&P 500 index, but its expenses are 0.03 %. This is the same amount that you will pay to own Ishaares Core S & P 500 ETF (Nysemkt: IVV)Another s & p 500 tracker index. Even Vanjard Index Fund 500Traditional Investment Fund, has a fewer expenses than SPDR S & P 500 ETF TRUST, by 0.04 %.

Looking at the regular vanilla approach taken by the SPDR S & P 500 ETF TRST, the ETF expenses are very high for similar products. This means that there is no good reason to buy it. Unless you feel some cache in saying that you are paying excessive possession of the first ETF that is created at all, you are likely to search elsewhere if you want a box that tracks the S&P 500 index.