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How to invest in the S&P 500 from Australia

You can invest in the S&P 500 by purchasing individual shares or exchange-traded funds. Here's how to get started.

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To invest in the S&P 500 index, you could buy all 500 stocks or invest in an S&P 500 index fund. Either way, the easiest way to do this is through an online share trading platform.

5 steps to investing in the S&P 500 from Australia

  1. Choose a broker that offers either US stocks or S&P 500 exchange-traded funds (ETFs).
  2. Provide ID and fund your account.
  3. Research the different ETFs and stocks available and compare prices.
  4. Select your S&P 500 index fund or stocks.
  5. Purchase your ETF or stocks by setting a buy price or using a "market order".

What is the S&P 500 index?

The S&P 500 or the Standards & Poor's 500 is an index that measures the 500 largest corporations by market capitalisation listed on either the New York Stock Exchange or the Nasdaq Composite.

The idea behind the index is to give investors a quick look at how the overall market is going, although some take it as an indication of the economy at large.

But there are a few criteria you need to tick off to make the list.

To be eligible to enter the S&P 500, a company should be a US company, have a market capitalisation of at least US$11.8 billion, be highly liquid, have a public float of at least 10% of its shares outstanding and its most recent quarter's earnings and the sum of its trailing 4 consecutive quarters' earnings must be positive.

The S&P 500 is a float-adjusted market-cap index and is calculated by the market cap of all S&P 500 stocks divided by an index divisor, which is a proprietary figure that Standard & Poor's owns.

The S&P 500 provides exposure to the top companies in the largest and most dynamic economy in the world. Compared to the Australian market, which is top heavy in banks and miners, the S&P 500 also offers diversification for Australian investors by providing relatively higher exposure to the high growth technology sector.

Investing in the S&P 500 through stocks

The S&P 500 index is composed of 503 stocks issued by 500 different companies. This is due to companies such as Alphabet having issued multiple classes of shares.

But just because there are 500 options, it doesn't mean you need to buy them all. Instead, you can purchase individual shares or a group of them that you think will have a stronger return than the S&P 500 will have as an index. When you are working this out you should incorporate dividends as well as share price appreciation.

While doing this is more risky and will take more time in researching compared with buying ETFs, it does have the added advantage of giving you larger returns than ETFs if done effectively.

If you're looking to buy individual stocks on the S&P 500 you should follow a few steps:

  1. Find a broker that allows you to invest in the S&P 500. Not every broker has access to every market. Instead you'll need to find one that lets you invest in US stocks. When choosing a broker keep in mind where you want to trade, the fees with trading and any additional fees the broker says it will charge.
  2. Do your research. If you're going to buy an individual share or basket of shares (usually more desirable), you should understand the ins and outs of the business you own. After all, you wouldn't just give your money away, so you shouldn't just invest in any old share. Instead learn the business's current balance sheet, future opportunities and fair price to pay for the shares.
  3. Deposit funds. You'll need to add funds into your account before you can buy any shares.
  4. Buy the index fund. Once your money has been deposited, you can then buy stocks in the S&P 500. You'll generally pay a small annual commission fee and foreign exchange fee when you trade US stocks.
  5. Review. Once you've purchased the stocks, it's important to keep an eye on the business's performance. While this doesn't necessarily mean the company's share price (although it can be an indication), you will need to actively monitor how the business is performing compared with your expectations.

Which companies make up the S&P 500?

The S&P 500 is made up of 505 listed stocks across 500 of the largest US companies by market capitalisation, which means it contains some of the most recognisable and popular stocks in the world.

But it works off a market cap, meaning bigger companies make up a larger part of the index. This constantly fluctuates, but at the time of writing, the top 10 were as follows.

  1. Apple (AAPL)
  2. Microsoft (MSFT)
  3. Amazon (AMZN)
  4. Tesla (TSLA)
  5. Alphabet (GOOGL) Class A
  6. Alphabet (GOOGL) Class C
  7. Nvidia
  8. Berkshire Hathaway Class B
  9. Meta Platforms [formerly Facebook] (FB)
  10. UnitedHealth Group

Investing in the S&P 500 through ETFs

Instead of investing in individual shares of the 500 companies on the S&P 500, you can invest in the entire group of stocks through an index fund.

This is the easiest way to invest in the S&P 500. While you won't "outperform the market" you will get the market average, which is actually a strong return. And you'll achieve this with a lot less effort than researching individual shares.

Take a look at the Vanguard index chart; if you invested $10,000 30 years ago and just left it through the crash, GFC and COVID downturn, it would be worth $182,376 in 2022. Not bad for doing very little work.

An ETF is a low-cost investment fund that can be traded on a stock exchange such as the S&P 500. These funds are created by ETF issuers and fund managers and are made up of a basket of securities such as shares, cash and bonds.

  1. Find an S&P 500 index fund. Some index funds track the performance of all 500 S&P stocks, whereas others only track a certain number of stocks or are weighted more towards specific stocks. Some are actively managed while others do little more than track the index. Do your research before deciding which is best for you.
  2. Open a share trading account. In order to invest in an S&P 500 ETF, you'll need to open a trading account with a broker or a online share trading platform.
  3. Deposit funds. You'll need to deposit funds into your account to begin trading.
  4. Buy the index fund. Once your money has been deposited, you can then buy units in the S&P 500 index fund, the same as you would buy stocks. You'll generally pay a small annual fee (called the MER fee) to the ETF fund manager, which is taken out of your returns.

List of S&P 500 index funds in Australia

To help get you started, here's a list of S&P 500 ETFs in Australia to date:

  • iShares S&P 500 AUD Hedged ETF: (IHVV)
  • iShares S&P 500 ETF:L (IVV)
  • BetaShares S&P 500 Equal Weight ETF (QUS)
  • SPDR S&P 500 ETF Trust: (SPY)
  • BetaShares S&P 500 Yield Maximiser Fund (Managed Fund): (UMAX)
  • ETFS S&P 500 High Yield Low Volatility ETF: (ZYUS)

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S&P 500 Market Update: December 2023

  • 6 Nov 2023: The S&P 500 index officially fell into a correction in late October, after falling more than 10% from its February peak. This is thanks to ongoing inflation and conflict in the Middle East.
  • 6 Sept 2023: The S&P 500 index has flat over August as reporting season wrapped up.
  • 1 Aug 2023: The S&P500 index was relatively flat over July, rising around 2.99% as investors weigh upcoming earnings results in the US.
  • 5 July 2023: The S&P 500 index is up over 16% YTD bolstered by a tech stock rally as inflation cools and central bank interest rate hikes take a pause.
  • 29 June 2023: US stocks jumped as positive economic data helped to ease recession fears. US jobless numbers dropped sharply and first quarter GDP data was revised as better than expected.

How to "trade" the S&P 500

When you hear of someone "trading the S&P 500", they're most likely referring to futures trading - typically executed via Contracts for difference (CFDs) in Australia.

This is a very different approach to "investing" in the S&P 500, which is typically associated with long-term investing into lower risk index funds.

Futures products, such as CFDs, on the other hand, are a derivatives product where you can speculate on index price movements. With CFDs, you never actually own the underlying asset. This is very different to index fund "investing" as it's much riskier and you're typically using leverage to amplify profits and losses.

Important: Futures and CFD trading is much riskier than regular share or index fund investing and should only be attempted by experienced traders.

Compare S&P 500 trading platforms

1 - 6 of 6
Name Product Standard brokerage for US shares Currency conversion fee Asset class
Finder AwardExclusive
50-150 pips
ASX shares, Global shares, US shares, ETFs
CFD service. Capital at risk.
Finder exclusive: Get 12 months of investment tracking app Delta PRO for free when you fund your eToro account (T&Cs apply).
Join the world’s biggest social trading network when you trade stocks, commodities and currencies from the one account.
IG Share Trading
Finder Award
IG Share Trading
ASX shares, Global shares, US shares, UK shares, ETFs
$0 brokerage for US and global shares plus get an active trader discount of $5 commission on Australian shares.
Enjoy some of the lowest brokerage fees on the market when trading Australian and international shares, plus get access to 24-hour customer support.
Moomoo Share Trading
55 pips or 0.0055 AUD/USD
ASX shares, Global shares, US shares, ETFs
Finder exclusive: Get an additional 30 days on top of the regular brokerage-free period for new accounts (see link for details). T&Cs apply.
Trade shares on the ASX, the US markets and buy ETFs with Moomoo. Plus join a community over 20 million investors.
CMC Invest
Finder Award
CMC Invest
ASX shares, Global shares, Options trading, US shares, mFunds, ETFs
$0 brokerage on global shares including US, UK and Japan markets.
Trade up to 35,000 products, including shares, crypto, ETFs and managed funds, with access to 15 major global and Australian stock exchanges. Plus, buy Aussie shares for $0 brokerage up to $1,000. (Limited to one buy order per stock per trading day).
0.50% (50 pips)
ASX shares, Options trading, US shares, ETFs
Earn US$100 in cash vouchers when you fund your new account and maintain a minimum balance of US$2,000 by Dec 29 until March 31, 2024. Plus, earn up to 5.3% p.a. interest on your US cash account (T&Cs apply).
Trade ASX and US stocks and US options, plus gain access to inbuilt news platforms and educational resources. You can also start trading for less with fractional shares.
Tiger Brokers
Tiger Brokers
37 pips
ASX shares, Global shares, US shares, ETFs
Finder exclusive: Get 10 brokerage-free trades for the US or ASX market for the first 180 days and US$50 fractional shares when you deposit at least US$500. Plus, all new customers get 1 free trade per month for the first 12 months (T&Cs apply).
Get one brokerage-free trade per month for the first 12 months for US or ASX markets. T&Cs apply.

Important: The standard brokerage fee displayed is the trade cost for new customers to purchase $1,000 of either Australian or US shares. Where a platform charges different fees for both US and Australian shares we show the lower of the two. Where both CHESS sponsored and custodian shares are offered, we display the cheapest option.

Disclaimer: General information only. All forms of investments (and in particular, trading CFDs, commodities and forex) carry significant risk, including the risk of losing more than the invested amounts, market volatility and liquidity risks. Past performance is no guarantee of future results. Such activities are not suitable for most investors.
1 - 8 of 8
Name Product Minimum Opening Deposit Minimum Opening Deposit Commission - ASX 200 Shares Available CFD markets Platforms
Pepperstone CFD
$5 or 0.07%
Australian Stocks, Commodities, Cryptocurrencies, ETFs, Forex, Global Stocks, Indices (CFDs only)
MetaTrader 4
MetaTrader 5
Disclaimer: CFD Service. Your capital is at risk.
Get access to more than 60+ forex and CFD markets when you sign up with this award-winning Australian broker. Plus, access the new advanced TradingView charts platform.
Vantage CFD
No commission
Commodities, Cryptocurrencies, ETFs, Forex, Global Stocks, Indices (CFDs only)
MetaTrader 4
MetaTrader 5
Disclaimer: CFD Service. Your capital is at risk.
Vantage has some of the lowest CFD trading fees in Australia including $0 commissions on all Gold trades. Plus you can find global trends and place trades through the new TradingView charts platform.
IG CFD broker
0.08% with $7 minimum
Bonds, Commodities, Cryptocurrencies, ETFs, Forex, Global Stocks, Indices, Options (CFDs only)
MetaTrader 4
ProReal Time
IG Trading Platform and Apps
Disclaimer: CFD Service. Your capital is at risk.
Trade from over 15,000 markets with Australia's leading service for CFD trading and forex.
Plus500 CFD
No commission
Commodities, Cryptocurrencies, ETFs, Forex, Global Stocks, Indices, Options (CFDs only)
Plus500 Trading Platform
Disclaimer: CFD Service. Your capital is at risk.
Trade CFDs on Australian and International shares, indices, cryptocurrencies, commodities and more.
IC Markets CFD (True ECN Account)
0.1% per side
Australian Stocks, Global Stocks, Indices, Commodities, Forex, Cryptocurrencies (CFDs only)
MetaTrader 4
MetaTrader 5
Disclaimer: CFD Service. Your capital is at risk.
Trade 230+ different products with fast execution under 40 milliseconds on average.
Saxo Invested CFD
0.10% with $6 minimum
Bonds, Commodities, Cryptocurrencies, ETFs, Forex, Global Stocks, Indices, Options, (CFDs only)
Disclaimer: CFD Service. Your capital is at risk.
Award-winning trading platfrom with extensive charting tools and reliable execution.
Blueberry Markets CFD Trading
$20 per month subscription plus 2% of trade size
Australian Stocks, Commodities, Cryptocurrencies, Indices (CFDs only)
MetaTrader 5
Disclaimer: CFD Service. Your capital is at risk.
Bottom of the market fees on forex, CFDs and commodities with 24/7 quality customer service.
ACY Securities CFD
No commission
Australian Stocks, Bonds, Commodities, Cryptocurrencies, ETFs, Forex, Global Stocks, Indices, Metals (CFDs only)
MetaTrader 4
MetaTrader 5
Disclaimer: CFD Service. Your capital is at risk. Trade over 2,000 products across CFDs, forex, indices, metals, shares, commodities and cryptocurrency, starting from as low as $50 a trade.

Trading CFDs and forex on leverage is high-risk and you could lose more than your initial investment. It may not be suitable for every investor. Refer to the provider’s PDS and consider the risks before trading.

To view our best US S&P 500 ETFs click here.

Should you choose an index fund or buy individual shares?

Unfortunately, there isn't a one-size-fits-all answer. Instead, it greatly depends on your goals, risk tolerance, strategy and individual circumstances.

The argument for index investing is the returns are quite strong. If you take the S&P 500's return since it was introduced in 1957, you'd get an annualised return of 10.7%. In other words you'd double your money in less than 7 years. And it takes very little work to do so.

The argument for buying individual stocks is that you can potentially "beat the market" and increase your return. If you can do this over a number of years, you'll obviously beat the average and increase your returns. By that same token, you're also at a greater risk of facing losses if you pick the wrong stocks.

The good news is you don't really need to choose either. A lot of investors simply mix index funds (such as ETFs) and individual shares.

The bottom line

For most investors having at least some exposure to the companies listed in the S&P 500 will help grow their portfolio. After all, these are some of the biggest companies in the world and from an index point of view have provided stable returns for investors, albeit over the long term.

However, how you gain exposure to the market varies depending on your style. If you’re looking to beat the market, you can’t take a basket approach because getting the market average makes it impossible to outperform. In this instance, a more actively managed approach will be required.

On the other hand, if you simply want to grow your money over the long term, a more hands-off passive approach through ETFs could help you.

Frequently asked questions

Important information: Powered by This information is general in nature and is no substitute for professional advice. It does not take into account your personal situation. This information should not be interpreted as an endorsement of futures, stocks, ETFs, CFDs, options or any specific provider, service or offering. It should not be relied upon as investment advice or construed as providing recommendations of any kind. Futures, stocks, ETFs and options trading involves substantial risk of loss and therefore are not appropriate for most investors. You do not own or have any interest in the underlying asset. Capital is at risk, including the risk of losing more than the amount originally put in, market volatility and liquidity risks. Past performance is no guarantee of future results. Tax on profits may apply. Consider the Product Disclosure Statement and Target Market Determination for the product on the provider's website. Consider your own circumstances, including whether you can afford to take the high risk of losing your money and possess the relevant experience and knowledge. We recommend that you obtain independent advice from a suitably licensed financial advisor before making any trades.

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