S&P 500 ETF

The S&P 500 is a market that has a free float-weighted index of 500 large cap prices of commonly traded stocks in the United States. The S&P consists of 500 large and publicly held companies which are actively traded on two of the largest of American stock market companies – those of the NAZDAQ OMX and the NYSE Euronext.

The S&P 500 is the second most followed index of large cap companies in the US after the Dow Jones Industrial Average and is regarded as a good indication of the ups and downs of the American economy as a whole.

S&P stands for Standard and Poor, which is a division of McGraw-Hill, where the S&P 500 does not only refer to the index but to the companies that have their common stock in the index too.

The stocks included in the S&P 500 index are also part of the broader S&P 1500 and S&P Global 1200 stock market indice.

The idea behind the S&P 500 ETF or exchange traded funds is that they attempt to replicate by holding the same stocks as the S&P 500 in the same proportions the performance of the S&P 500 index.

When investors buy shares of an ETF they are actually buying into a representation of the ownership of equity securities that make up the Standard & Poor 500 Index