Investing in the U.S. market has long been a lucrative opportunity for investors worldwide. With its vast economy, diverse industries, and proven historical performance, the U.S. market offers unique advantages for those looking to grow their wealth over the long term.
The U.S. market is enormous. As of December 2023, the total market capitalisation of the U.S. stock market reached an astonishing US$50.8 trillion, 83 times Singapore’s total market capitalisation and 138 times Malaysia’s. In addition to being a major global market, the U.S. hosts some of the largest companies worldwide, including Microsoft, Apple, and Nvidia. This market’s extensive scope and depth offer numerous opportunities and robust growth potential, increasingly drawing attention from investors across the globe.
Why choose the S&P 500
One of the most popular and more accessible ways to gain exposure to the U.S. market is through the S&P 500, a market index that tracks the top 500 largest publicly traded companies in the country, accounting for approximately 80% of U.S. market capitalisation. Investing in the S&P 500 provides investors with exposure to a broad range of industries, including technology, consumer goods and healthcare, providing inherent diversification.
Historically, the S&P 500 has delivered a strong performance over the past 20 years. Most notably, the index returned an impressive 26% last year. And over the last two decades, it has maintained a steady average annualized return of over 10%.
Among the various ways to invest in the S&P 500, the SPDR S&P 500 ETF (SPY) by State Street stands out as a popular choice for many investors. The SPY is an exchange-traded fund (ETF) that tracks the performance of the S&P 500 index. It is the oldest and largest ETF, with assets under management (AUM) of over US$520 billion as of April 2024. The SPY is also
