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Which ETFs to buy for investing in S&P 500 and Nasdaq 100 indices?


Investors looking to buy stocks listed on S&P 500 and Nasdaq 100 indices buy them to diversify their domestic portfolio. Investing in US stocks brings in the necessary diversification in a portfolio and also manages the Rupee-Dollar forefign exchange risk over the long term.

As an investor, you may consider buying individual shares such as Apple (AAPL), Microsoft (MSFT), Alphabet (GOOGL), Amazon (AMZN), Tesla (TSLA), Johnson & Johnson (JNJ), JPMorgan Chase (JPM), UnitedHealth Group (UNH), Procter & Gamble (PG) amongst others. Some of these stocks are listed on both S&P 500 and Nasdaq 100 while some of them only on any one of them.

An alternative way to buy every listed stock of S&P 500 and Nasdaq 100 is to buy an exchange traded fund that tracks the two leading US indices – S&P 500 and Nasdaq 100.

Also Read Nasdaq Stocks: List of 10 large-cap US shares that fell the least in 2022

US ETFs give you the benefit of diversifying in international stocks and also provides access to various leading themes in the US stock market.

The ETF to invest in S&P 500 stocks is SPDR S&P 500 ETF Trust (SPY) which is popularly known as the SPY ETF. SPY is an ETF that tracks the S&P 500 index. S&P 500 index is widely regarded as the best single indicator of large-cap US equities and by investing in SPY ETF, you get exposure to some of the best US stocks across eleven major industries. The top three sectors in the S&P 500 are Information Technology, Health Care and Communication Services. The returns of SPY closely track the returns generated by the S&P 500 index.

The ETF to invest in Nasdaq 100 stock is Invesco QQQ ETF. QQQ is an exchange-traded fund that gives you access to Nasdaq 100 companies in a single investment and features Apple, Google, Microsoft, and more. QQQ also provides investors an exposure to companies that are at the forefront of transformative, long-term themes such as Augmented Reality, Cloud Computing, Big Data, Mobile Payments, Streaming Services, Electric Vehicles, and more.

While both SPY and QQQ ETFs may be purchased to diversify across US stocks, keep a plan in place to benefit from their potential over the long term by systematically buying their units at a regular interval. Any fall or correction in stock values may be used as an opportunity to add more for the long term.

Disclaimer: The investing decision in these or any other stock should be taken on your own after carefully evaluating the business and other fundamentals of the company or after consulting one’s financial advisor. It is not a recommendation to buy, hold or sell in any of the stocks. Financial Express Online does not bear any responsibility for their investment advice.





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