SPLG: This Could Be an Ideal ETF for New Investors

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New investors just starting out have many choices available to them, and deciding where to begin can be a challenge. Rather than choosing one stock or sector to invest in, investors can instead gain broad exposure to hundreds of the U.S. market’s best stocks through a broad-market S&P 500 ETF like the SPDR Portfolio S&P 500 ETF (SPLG).

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I’m bullish on SPLG due to its strong history of returns and its easy access to the earnings power of over 500 of the U.S.’s best companies in one simple and efficient vehicle. Not only that, it does so for a very low fee, as we’ll discuss in the article. These factors make SPLG a sound choice for all investors. In particular, its instant diversification, extremely low cost, and impressive track record make it an especially appealing choice for new investors looking to make their first investment and to choose an investment to build their portfolios around.

What Is the SPLG ETF’s Strategy? 

According to its issuer, State Street Global Advisors, SPLG is a “low-cost ETF that seeks to offer precise, comprehensive exposure to the US large-cap market segment.”

State Street also explains that SPLG is “one of the low-cost core SPDR Portfolio ETFs, a suite of portfolio building blocks designed to provide broad, diversified exposure to core asset classes.”

Harness 80% of the U.S. Stock Market with One ETF 

This strategy plays out when you look at SPLG’s holdings. The fund simply invests in the S&P 500 (SPX), which “represents approximately 80% of the US market.”

This is a big part of what makes SPLG an ideal building block for investors who are just starting out—rather than picking one company or sector, you are immediately getting broad exposure to the companies that account for about 80% of the U.S. market. This includes many of the best, most profitable, and most innovative companies in the United States (and the world).

In fact, SPLG gives investors exposure to semiconductors and artificial intelligence (AI) through Nvidia (NVDA), e-commerce and the cloud through Amazon (AMZN), electric vehicles and renewable power through Tesla (TSLA), and so much more.

Below, you’ll find an overview of SPLG’s top 10 holdings using TipRanks’ holdings tool.

It’s worth noting that these are also some highly rated companies, according to TipRanks’ Smart Score. The Smart Score is TipRanks’ quantitative stock scoring system that gives stocks a score from one to 10, based on eight key market factors. Scores of eight, nine, or 10 are considered equivalent to an Outperform rating.

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