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Invest In S and P 500 Stocks Through Index Funds

07 Aug 2023

What Is The S&P 500?

The S&P 500 is a dynamic stock index that constitutes the top 500 trading companies in the US. It selects stocks with a weighted market capitalization method and limits inclusion to companies with a market cap of $2.8 billion. 

Some of the top companies included in the index are McDonald’s, Tesla, Google, and Pepsi, among others. As is apparent, investing in the S&P 500 makes for a great way to get exposure to US stocks.

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Why Invest In S&P 500?

Index funds are designed to track how a certain market is performing. Their primary objective is to provide investors with overarching market exposure and portfolio diversification at a low expense margin by following some predetermined rules for the specific market index.

The S&P 500 index is one such safe option to gain exposure to US stocks. The S&P 500’s compound average annual growth rate has been around 10.7% per year. This makes it an ideal option for average-risk investors looking to diversify their portfolios. When you invest in the S&P 500 through an index, you gain the following advantages.

​1. Exposure To Multiple High-quality Stocks

The stocks in the S&P 500 are continually updated and constitute some of the world’s best companies.

2. Reliable And Low-Risk Investment

Since the companies included have a large market cap, and expand across several sectors, investing in the S&P 500 index is safe and low-risk.

3. ​An Affordable Experience

Investing in S&P 500 won’t burn a hole in your pocket with options such as Motilal Oswal S&P 500 Index Fund.

4. Convenient Investments

Investing in the S&P 500 index is more convenient than investing directly in individual US stocks. However, when you invest in an S&P 500 fund, such as one offered by Motilal Oswal, you can save up for the hassle.

How To Invest In The S&P 500 From India?

Investing in the S&P 500 from India can be done through a variety of means, including ETFs and index funds, such as the Motilal Oswal S&P 500 index. Another way could be to invest in Indian mutual funds that invest in the S&P 500.

Opening an overseas account with your broker can also open your doors to unlimited possibilities when it comes to investing in US stocks.

Closing Thoughts

With growing financial needs, investors need to make their portfolios safer and more dynamic. Investing in a bouquet of stocks with options like index funds serves this purpose tactfully. As an investor, you must understand your risks and responsibilities completely before making any investment decisions. 

 

Related Articles: How to Open a Demat Account Without a Broker | Factors to Keep in Mind While Opening a Demat account | Factors to Consider When Opening a Demat Account | 10 Points to Remember When Operating your Demat Account | Types Of Demat Account & Trading Account

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