What Is the S&P 500?
The S&P 500 is a stock index of about 500 of the largest publicly listed companies in the USA, weighted by market capitalisation — it covers roughly 80% of the total value of the US stock market and is widely seen as THE benchmark for the US stock market. It was launched in 1957 by Standard & Poor’s. You cannot buy the index directly; investors gain exposure through an ETF that tracks it. We explain how the index is weighted, how to invest via an ETF, and what the US-dollar currency risk means for euro-based investors.
What is the S&P 500 — explained simply
The S&P 500 (Standard & Poor’s 500) is a stock index of about 500 of the largest publicly listed companies in the USA. The companies are weighted by their market capitalisation — the more a company is worth on the stock market, the larger its weight in the index. Together, these 500 firms account for roughly 80% of the total value of the US stock market.
The index was launched in 1957 by Standard & Poor’s. Ever since, it has been widely seen as the benchmark for the US stock market: when people talk about “the American stock market,” they usually mean the S&P 500. You cannot buy the index itself — you invest through an ETF that tracks it.
How is the S&P 500 weighted?
The S&P 500 is weighted by market capitalisation (more precisely, by free-float market cap). That means the most valuable companies make up the largest share. At the top are mainly the big technology names — so the index is heavily tech-weighted at the top:
Largest holdings in the S&P 500 (approx., June 2026)
| Company | Sector |
|---|---|
| Apple | Technology |
| Microsoft | Technology |
| Nvidia | Semiconductors |
| Amazon | Consumer / Cloud |
| Alphabet (Google) | Technology |
| Meta | Technology |
This concentration is both an opportunity and a risk: when tech does well, it lifts the whole index — but if the big names weaken, that drags the S&P 500 down noticeably too.
How do I invest in the S&P 500? Via an ETF
Since you cannot buy the index directly, you invest through an ETF that tracks the S&P 500. In Europe, these three low-cost UCITS ETFs are the most common:
Common S&P 500 UCITS ETFs (as of June 2026)
| ETF | ISIN | TER p.a. |
|---|---|---|
| iShares Core S&P 500 UCITS ETF | IE00B5BMR087 | 0.07% |
| Vanguard S&P 500 UCITS ETF | IE00B3XXRP09 | 0.07% |
| Invesco S&P 500 UCITS ETF | IE00B3YCGJ38 | 0.05% |
The ongoing charges (TER) are extremely low at 0.05–0.07% per year. Many brokers also offer savings plans, so you can invest in an S&P 500 ETF automatically each month, even with small amounts.
The currency risk: the S&P 500 trades in US dollars
The S&P 500 is calculated in US dollars. As a euro-based investor you therefore carry a USD/EUR currency risk: if the dollar weakens against the euro, it eats into your return in euros — even if the index rises in dollar terms. Conversely, a strong dollar can boost your return. A long investment horizon usually smooths out these swings.
A quick comparison with Germany’s leading index: the S&P 500 in its standard form is a price index, whereas the DAX is a performance index (it reinvests dividends). The two quoted levels are therefore not directly comparable one-to-one.
Over many decades, the S&P 500 has averaged roughly 7–10% per year including dividends (in US dollars). That is a long-term historical average across periods that included deep drawdowns — it is not a guarantee for the future. Euro-based investors also carry the USD/EUR currency risk. An S&P 500 ETF is therefore best suited to long-term wealth building, where you can sit out market swings.
FAQ — What is the S&P 500? 2026
What is the S&P 500 in simple terms?
The S&P 500 is a stock index of about 500 of the largest publicly listed companies in the USA, weighted by market capitalisation. It covers roughly 80% of the total US stock market and, since its launch in 1957 by Standard & Poor’s, has been widely seen as the leading benchmark for the US stock market.
How can I invest in the S&P 500?
You cannot buy the index directly — you invest through an ETF that tracks it. Common, very low-cost UCITS ETFs are the iShares Core S&P 500 (ISIN IE00B5BMR087, TER 0.07%), the Vanguard S&P 500 (IE00B3XXRP09, TER 0.07%) and the Invesco S&P 500 (IE00B3YCGJ38, TER 0.05%). Many brokers also offer savings plans for them.
Which stocks have the biggest weighting in the S&P 500?
Because the S&P 500 is weighted by market capitalisation, the most valuable companies dominate. The largest holdings include (as of June 2026) Apple, Microsoft, Nvidia, Amazon, Alphabet (Google) and Meta. The index is therefore heavily tech-weighted at the top. Note that German tax rules are only an example here; rules vary by country, so check your local rules.
What return does the S&P 500 deliver?
Over many decades, the S&P 500 has averaged roughly 7–10% per year including dividends in US dollars. This is a long-term average and not a guarantee of future results. Euro-based investors also carry a USD/EUR currency risk, because the index is calculated in US dollars.