For years now, a significant cohort of investors gravitated towards the allure of the S&P 500 index over individual stocks.
This strategic preference arises from the desire for diversification and exposure to the overall market, minimizing the risk associated with single-stock volatility.
In other words, investing in the S&P 500 through related exchange-traded funds (ETFs) and index funds offers investors a streamlined approach, providing a cross-section of America’s top-performing companies and presenting investors with a comprehensive snapshot of the market’s health and trends.
Picks for you
In this context, we take a closer look at the extent of exposure investors gain to some of the largest US stocks by investing $10,000 in the SPDR S&P 500 ETF Trust (SPY), the widely favored S&P 500-focused ETF.
Stocks with biggest SPY weighting
Allocating $10,000 into SPY yields a diversified investment spanning hundreds of S&P 500 stocks. However, this investment isn’t evenly distributed among individual stocks but is rather proportionally allocated based on the weighting each stock holds within the ETF, meaning larger companies have a greater representation in the fund.
The top five SPY stocks by weighting are Apple (NASDAQ: AAPL), Microsoft (NASDAQ: MSFT), Alphabet (NASDAQ: GOOGL), Amazon (NASDAQ: AMZN), and Nvidia (NASDAQ: NVDA).
As such, by investing $10,000 in the fund, investors are buying $734 of AAPL, $733 of MSFT, $400 of GOOGL, $348 of AMZN, and $314 of NVDA stocks, according to StockMKTNewz.
The next five stocks by SPY weighting include Meta Platforms (NASDAQ: META), Berkshire Hathaway (NASDAQ: BRK.B), Tesla (NASDAQ: TSLA), United Health (NYSE: UNH), and Eli Lilly (NYSE: LLY).
A $10,000 investment in the popular fund buys $198 of META shares, $172 of BRK.B, $169 of TSLA, $132 of UNH, and $124 of pharmaceutical giant, LLY.
Other stocks that have a noteworthy contribution to the SPY fund include Exxon (NYSE: XOM), Broadcom (NASDAQ: AVGO), Johnson & Johnson (NYSE: JNJ), and numerous others.
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Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.
