The Best S&P 500 ETF to Invest $500 in Right Now

As of March 12, the S&P 500 index trades 4% below its peak. Despite the latest dip, it's impossible to have any faults with the popular benchmark's long-term performance. Over the past decade, investors registered a 297% total return.

If you're looking for a way to gain smart exposure to this closely watched index, here's the best S&P 500 exchange-traded fund (ETF) to invest $500 in right now.

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A popular product offered by a massive asset manager

With $12 trillion of assets under management (as of November 2025) and an operating history dating back to 1975, Vanguard is a highly regarded firm in the investment industry. For access to the S&P 500, it offers the Vanguard S&P 500 ETF (NYSEMKT: VOO). This is one of the most popular investment vehicles on the planet.

By owning 500 or so large U.S.-based companies, investors are inherently bullish on the American economy. All sectors are represented, but it's no surprise that the technology sector has a much higher weighting at 33.4% of the entire portfolio. To dig even deeper, it's important to know that the "Magnificent Seven" stocks account for 34.3% of the asset base.

What's attractive about the Vanguard S&P 500 ETF is that it gives investors an extremely accessible and convenient method of achieving diversification at an extremely low expense ratio of 0.03%. Just $0.15 of a $500 allocation will be paid to Vanguard in the first year.

And it's impossible to overstate the ease of adopting this passive strategy. Interested investors do not need advanced financial modeling and analytical skills. They also don't need to spend hours every week looking at company filings. That frees up a lot of time that can improve one's quality of life. That's extremely valuable.

Investors should adopt the right perspective

As mentioned, the S&P 500's performance in the last decade is impressive. It's significantly higher than the index's long-term average of 10% annualized returns.

The market cares about what the future will bring. Therefore, investors should be critical of the sustainability of these kinds of returns. It's smart to entertain the possibility that the Vanguard S&P 500 ETF sees its performance revert to the historical mean. Valuation concerns shouldn't be ignored. And they present new investors with an unfavorable entry point compared to the past.

However, given the fact that some of the biggest technology companies are showing no signs of slowing down, coupled with passive investments attracting capital flows and ongoing currency debasement, investors should be bullish.

It's important to understand the market environment. It's also a good idea to remain optimistic over the long term.

Neil Patel has positions in Vanguard S&P 500 ETF. The Motley Fool has positions in and recommends Vanguard S&P 500 ETF. The Motley Fool has a disclosure policy.