S&P 500

Index funds, including mutual funds and exchange-traded funds (ETFs), can replicate, before fees and expenses, the performance of the index by holding the same stocks as the index in the same proportions. ETFs that replicate the performance of the index are issued by The Vanguard Group ({{NYSE Arca|VOO}}), iShares ({{NYSE Arca|IVV}}), and State Street Corporation (SPDR S&P 500 ETF Trust, {{NYSE Arca|SPY}} and {{NYSE Arca|SPLG}}). The most liquid based on average daily volume is ({{NYSE Arca|SPY}}), although SPY has a higher annual expense ratio of 0.09% compared to 0.03% for VOO and IVV, and 0.02% for SPLG. Mutual funds that track the index are offered by Fidelity Investments, T. Rowe Price, and Charles Schwab Corporation.{{cite news | url=https://money.usnews.com/investing/funds/slideshows/s-p-index-funds-to-buy-now | title=7 S&P Index Funds to Buy Now | first=Ellen | last=Chang | work=U.S. News & World Report | date=June 28, 2019}}{{Cite web |url=https://www.thebalancemoney.com/best-sandp-500-index-funds-2466399 |title=The Best S&P 500 Index Funds |last=Thune |first=Kent |website=The Balance |archive-url=https://web.archive.org/web/20230603123933/https://www.thebalancemoney.com/best-sandp-500-index-funds-2466399 |archive-date=June 3, 2023 |url-status=live}}

Direxion offers leveraged ETFs which attempt to produce three times the daily return of either investing in ({{NYSE Arca|SPXL}}) or shorting ({{NYSE Arca|SPXS}}) the S&P 500 index.{{Cite web | url=https://www.direxion.com/product/daily-sp-500-bull-bear-3x-etfs | title=SPXL SPXS | publisher=Direxion}} ProShares offers 2x daily return ({{NYSE Arca|SSO}}) and 3x daily return ({{NYSE Arca|UPRO}}).

In the derivatives market, the Chicago Mercantile Exchange (CME) offers futures contracts that track the index and trade on the exchange floor in an open outcry auction, or on CME's Globex platform, and are the exchange's most popular product. The Chicago Board Options Exchange (CBOE) offers options on the S&P 500 index as well as on S&P 500 index ETFs, inverse ETFs, and leveraged ETFs.

In 1860, Henry Varnum Poor formed Poor's Publishing, which published an investor's guide to the railroad industry.{{cite web | url=https://www.spglobal.com/en/who-we-are/our-history | title=Our History | publisher=S&P Global}} In 1923, Standard Statistics Company (founded in 1906 as the Standard Statistics Bureau) began rating mortgage bonds and developed its first stock market index consisting of the stocks of 233 U.S. companies, computed weekly.{{cite news | url=https://www.reuters.com/article/us-usa-stocks-sp-timeline-idUSBRE9450WL20130506 | title=Key dates and milestones in the S&P 500's history | first=Caroline | last=Valetkevitch | work=Reuters | date=May 6, 2013}} Three years later, it developed a 90-stock index, computed daily. In 1941, Poor's Publishing merged with Standard Statistics Company to form Standard & Poor's.{{cite encyclopedia | title=Standard & Poor's | encyclopedia=Gale Encyclopedia of U.S. Economic History | volume=3 | edition=2nd | publisher=Gale | editor-last=Riggs | editor-first=Thomas | date=2015 | page=1256 | id={{gale|CX3611000855}}}}

On Monday, March 4, 1957, the index was expanded to its current extent of 500 companies and was renamed the S&P 500 Stock Composite Index. In 1962, Ultronic Systems became the compiler of the S&P indices including the S&P 500 Stock Composite Index, the 425 Stock Industrial Index, the 50 Stock Utility Index, and the 25 Stock Rail Index.{{cite news | url=https://www.nytimes.com/1962/06/04/archives/vast-stock-wire-network-being-extended-to-coast.html | title=Vast stock wire network being extended to coast | work=The New York Times | date=June 4, 1962 | url-access=subscription}} On August 31, 1976, The Vanguard Group offered the first mutual fund to retail investors that tracked the index. On April 21, 1982, the Chicago Mercantile Exchange began trading futures based on the index. On July 1, 1983, Chicago Board Options Exchange began trading options based on the index. Beginning in 1986, the index value was updated every 15 seconds, or 1,559 times per trading day, with price updates disseminated by Reuters.{{cn|date=April 2025}}

On January 22, 1993, the Standard & Poor's Depositary Receipts exchange-traded fund issued by State Street Corporation began trading. On September 9, 1997, CME Group introduced the S&P E-mini futures contract. In 2005, the index transitioned to a public float-adjusted capitalization-weighting.{{cite web | url=https://mondovisione.com/media-and-resources/news/standard-and-poors-announces-changes-to-us-investable-weight-factors-and-final-f/ | title=Standard & Poor's Announces Changes to U.S. Investable Weight Factors and Final Float Transition Schedule | date=March 9, 2005}} Friday, September 17, 2021, was the final trading date for the original SP big contract which began trading in 1982.{{Cite web |date=August 6, 2021 |title=Termination of Trading, Conversion and Delisting of Standard-Size Standard and Poor's 500 Stock Price Index Futures and Options on Standard and Poor's 500 Stock Price Index Futures Contracts |website=CME Group |url=https://www.cmegroup.com/content/dam/cmegroup/notices/ser/2021/08/SER-8828.pdf}}

Like other indices managed by S&P Dow Jones Indices, but unlike indices such as the Russell 1000 Index which are strictly rule-based, the components of the S&P 500 index are selected by a committee. When considering the eligibility of a new addition, the committee assesses the company's merit using the following primary criteria:

1. Market capitalization - Market capitalization must be greater than or equal to US$20.5 billion (effective on January 2, 2025).{{cite web |url = https://www.spglobal.com/spdji/en/documents/indexnews/announcements/20250102-1476019/1476019_2025janmktcapguidelines.pdf |title=S&P Dow Jones Indices Announces Update to S&P Composite 1500 Market Cap Guidelines | work=S&P Global |date=January 2, 2025}} These market cap eligibility criteria are for addition to an index, not for continued membership. As a result, an index constituent that appears to violate criteria for addition to that index is not removed unless ongoing conditions warrant an index change.
2. Market liquidity and public float{{snd}}Annual dollar value traded to float-adjusted market capitalization is greater than 0.75.{{cite web |url=https://www.spglobal.com/spdji/en/documents/indexnews/announcements/20230104-1460758/1460758_spcomposite1500indexmktcapfalrconsultationresults1-4-2023.pdf |title=S&P Dow Jones Indices Announces Update to S&P Composite 1500 Market Cap Guidelines |date=January 4, 2022 | work=S&P Global }}
3. Volume{{snd}}Minimum monthly trading volume of 250,000 shares in each of the six months leading up to the evaluation date
4. Stock exchange{{snd}}Must be publicly listed on the New York Stock Exchange (including NYSE Arca or NYSE American), Nasdaq (Nasdaq Global Select Market, Nasdaq Select Market or the Nasdaq Capital Market) or Cboe (Cboe BZX, Cboe BYX, Cboe EDGA or Cboe EDGX).
5. Domicile{{snd}}The company must have its primary listing on a U.S. exchange.{{cite web |url=https://corporatefinanceinstitute.com/resources/equities/sp-500-index/ |title=S&P 500 Index|publisher= Corporate Finance Institute}}
6. Securities that are ineligible for inclusion in the index are limited partnerships, master limited partnerships and their investment trust units, OTC Bulletin Board issues, closed-end funds, exchange-traded funds, Exchange-traded notes, royalty trusts, tracking stocks, preferred stock, unit trusts, equity warrants, convertible bonds, investment trusts, American depositary receipts, and American depositary shares.

A stock may rise in value when it is added to the index since index funds must purchase that stock to continue tracking the index.{{cite web | url=https://www.nber.org/digest/nov13/w19290.html | title=Stock Price Reactions to Index Inclusion | first=Jay | last=Fitzgerald | publisher=National Bureau of Economic Research}}{{cite news | url=https://www.usatoday.com/story/money/columnist/krantz/2013/07/05/stocks-soar-added-sp-500/2447185/ | title=Do stocks soar if they get into the S&P 500? | first=Matt | last=Krantz | work=USA TODAY | date=July 5, 2013}}

A study published by the National Bureau of Economic Research in October 2021 alleged that companies' purchases of ratings services from S&P Global appear to improve their chance of entering the S&P 500 index, even if they are not the best fit per the rules.{{Cite web | url=https://www.nber.org/papers/w29365 | title=Is Stock Index Membership for Sale? | last1=Kun Li | first1=Xin | first2=Shang-Jin | last2=Wei | publisher=National Bureau of Economic Research | date=October 2021}}{{cite news |url=https://www.bloomberg.com/news/articles/2021-10-12/new-nber-study-asks-whether-s-p-500-membership-is-up-for-sale |title=S&P 500 Membership May Be 'For Sale,' NBER Research Suggests |work=Bloomberg News |last=Lee |first=Justina |date=October 12, 2021 | url-access=subscription}}

{{See also|Closing milestones of the S&P 500|List of recessions in the United States}}

File:S&P 500 Buybacks and Dividends.webp
{{color box|green}} Dividends]]

File:S & P 500 Annual Returns.webp

Since its inception in 1926, the index's compound annual growth rate—including dividends—has been approximately 9.8% (6% after inflation), with the standard deviation of the return, calculated on a monthly basis, over the same time period being 20.81%. While the index has declined in several years by over 30%,{{cite news | url=https://www.cnbc.com/2017/06/18/the-sp-500-has-already-met-its-average-return-for-a-full-year.html | title=The S&P 500 has already met its average return for a full year, but don't expect it to stay here | first=Michael | last=Santoli | work=CNBC | date=June 18, 2017}} it has posted annual increases 70% of the time,{{cite news | url=https://money.usnews.com/investing/investing-101/articles/2018-10-02/why-investors-love-the-s-p-500 | title=Why Investors Love the S&P 500 | first=Lou | last=Carlozo | work=U.S. News & World Report | date=October 2, 2018}} with 5% of all trading days resulting in record highs.{{cite news | url=https://fortune.com/2020/02/27/coronavirus-stock-market-worries-dont-panic-economy/ | title=Worried about the stock market? Resist the urge to panic | first=Ben | last=Carlson | work=Fortune | date=February 27, 2020 | url-access=limited}}

Returns are generally quoted as price returns (excluding returns from dividends). However, they can also be quoted as total return, which includes returns from dividends and the reinvestment thereof, and "net total return", which reflects the effects of dividend reinvestment after the deduction of withholding tax.

== See also ==

• List of S&P 500 companies
• SPDR S&P 500 ETF Trust
• S&P Dow Jones Indices

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{{Stock Market Indices}}{{Stock market indexes}}

{{North and South American Stock market indices}}

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