The S&P 500 is a market-cap-weighted index of 505 large-cap U.S. stocks, representing approximately 80% of the market value of the U.S. stock market. Often synonymous with "the market" in the U.S., the S&P 500 is the closest thing to a default U.S. stock index. Its largest components by weight are mega-cap stocks such as Microsoft Corp. (MSFT), Apple Inc. (AAPL), Amazon.com Inc. (AMZN) and Facebook Inc. (FB), and Alphabet Inc.'s class A shares (GOOGL). The S&P 500 was the benchmark of the first index fund, and the first ETF. An S&P 500 ETF is a good, inexpensive path for investors seeking exposure to the U.S. stock market. The index has been especially volatile in 2020 amid the coronavirus pandemic, with investors' views about the economy changing from bullish to bearish on the latest news. There are three ETFs that track the S&P 500, excluding inverse and leveraged funds.

Below, we look at the least expensive S&P 500 ETF for buy-and-hold investing and the most liquid for more active traders. All numbers are as of May 17, 2020.

Cheapest S&P 500 Index ETF: Vanguard S&P 500 ETF (VOO)

Because index-tracking ETFs will follow the performance of the Index, one of the most important determinants of long-term returns is how much a fund charges in fees. VOO appeals to investors seeking broad exposure to big stocks, and it is more diversified than most ETFs.

  • Expense Ratio: 0.03%
  • 1-Year Total Return: 1.5%
  • Annual Dividend Yield: 2.02%
  • 3-Month Average Daily Volume: 8,712,409
  • Assets Under Management: $129.6 billion
  • Inception Date: September 9, 2010
  • Issuer: Vanguard

Most Liquid S&P 500 ETF: SPDR S&P 500 ETF (SPY)

Liquidity indicates how easy it will be to trade an ETF, with higher liquidity generally translating to lower trading costs. Trading costs are not a big concern to people who want to hold ETFs long term, but if you’re interested in trading ETFs frequently, then it’s important to look for high-liquidity funds to minimize trading costs. While SPY is attractive to investors building a long-term portfolio, SPY is popular with more active traders who seek to move between risky and safe assets.

  • 3-Month Average Daily Volume: 178,357,968
  • Expense Ratio: 0.09%
  • 1-Year Total Return: 1.5%
  • Annual Dividend Yield: 2.03%
  • Assets Under Management: $254.8 billion
  • Inception Date: January 22, 1993
  • Issuer: State Street SPDR