1 No-Brainer S&P 500 Index Fund to Buy Right Now for Less Than $1,000

Key Points

• This fund offers you exposure to the top companies driving today’s economy.

• Investing in it offers you instant diversification, a move that could lower risk.

• 10 stocks we like better than SPDR S&P 500 ETF Trust ›

The S&P 500 stumbled earlier this year amid concerns about President Trump's tariffs on imports -- and the impact that may have on companies and the economy. But as the government showed flexibility on these duties and as companies continued to invest in technology and report solid earnings, worries subsided. And that helped the benchmark not only recover but go on to reach new record highs. As a result, those who invested in it, by holding shares of an S&P 500 index fund, scored a win.

The great news is it's not too late to get in on this investing opportunity -- one that has shown its strength decade after decade. The S&P 500 has delivered an average annual return of 10% ever since it launched as an index of 500 companies back in the 1950s. So, history shows us that betting on the index is a brilliant long-term move. What's the best way to do that today? Let's check out this no-brainer S&P 500 Index fund you can buy right now for less than $1,000.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Continue »

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The most-traded ETF

This particular asset is an exchange-traded fund (ETF) and upon its launch more than 30 years ago, it became the first U.S.-listed ETF. I'm talking about the SPDR S&P 500 ETF Trust (NYSEMKT: SPY). Today, with about 57 million shares traded daily, it's the most-traded ETF worldwide. This liquidity makes it easy to buy and sell its shares on the market -- just like your favorite large cap stocks. So if you're not familiar with ETF trading, don't worry, you'll follow the same procedure as you would when buying a stock.

Though ETFs, unlike stocks, come with fees, the SPDR S&P 500 ETF's are particularly low. It has an expense ratio, which reflects fees, of 0.09%. Generally, to maximize your potential for gains, you should avoid ETFs with expense ratios of more than 1%. This ETF fits that criteria by far.

Now, before talking specifically about this particular ETF, I'll briefly tell you what I like the most about ETFs, and this is the ability to instantly diversify. With just one purchase, you gain access to a broad number of companies according to the given theme -- in this case, we're talking about S&P 500 companies, but ETFs also can offer you exposure to industries such as biotech or retail.

The fantastic thing about diversification is it may lower your risk. If one particular stock or even a handful of stocks suffer, the performance of others may compensate -- and this may limit your losses, or prevent losses, in a difficult environment. Of course, if you're invested in a biotech ETF during a tough time for healthcare stocks, though, the whole ETF and its shareholders may feel the pain.

An investment across industries

And that's why it's a particularly good idea to also own shares of the SPDR S&P 500 ETF Trust -- because it's invested in the top companies across industries that are driving the day's economy. So even during the most difficult times, some members of the index will thrive.

The fact that the index rebalances on a quarterly basis, adding and subtracting members, also guarantees that you're always invested in the most powerful companies of the times. Today, those just so happen to be in the technology industry, with tech stocks representing about 33% of the index and the ETF. As for specific holdings, the ETF's biggest right now are Nvidia, Microsoft, and Apple, each with weightings of more than 6%.

So, owning shares of this fund offers you the opportunity to get in on many winning stocks rather than just betting on a small handful. The index includes 10 other industries from financials to healthcare and materials, and in the case of each of these industries, you're gaining exposure to the strongest of players.

Today, you can pick up one share of the SPDR S&P 500 ETF for about $660 -- or invest more to pick up a number of shares. In either case, it makes a wise move considering the fund's ability to offer you the best companies in the market -- and a proven track record over time. The S&P 500, and the funds that track it, have always recovered after tough times and gone on to advance to record levels. I would expect this to continue over the long run, and that's why this low-fee S&P 500 ETF is a no-brainer to buy with less than $1,000 right now.

Should you invest $1,000 in SPDR S&P 500 ETF Trust right now?

Before you buy stock in SPDR S&P 500 ETF Trust, consider this:

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Adria Cimino has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Apple, Microsoft, and Nvidia. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.