How to Buy and Invest in S&P 500 ETFs in Singapore: A Complete Guide to Index Funds

23 June 2024

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Investing in the S&P 500, one of the world's most renowned stock market indices, has long been a favored strategy for those looking to gain exposure to the US equities market. The S&P 500, officially known as the Standard & Poor’s 500, tracks the stock performance of 500 of the largest companies listed in the United States. Widely regarded as a key indicator of the US stock market's health, the S&P 500 represents about 80% of the US stock market’s value. While you cannot invest directly in the index, you can invest in Exchange-Traded Funds (ETFs) or mutual funds that mimic its performance.

Historically, the S&P 500 has demonstrated impressive long-term returns. For instance, an investment during the 2008 financial crisis would have yielded substantial gains by 2023. Today, Singaporean investors have numerous options to invest in the S&P 500. This guide aims to simplify the process, helping both new and seasoned investors navigate their way to successful S&P 500 investments.

What is the S&P 500

The S&P 500 index is composed of 500 leading U.S. companies from various sectors, including ITs, financials, healthcare, industrials and more. It is widely regarded as a benchmark for the overall health of the U.S. stock market and represents approximately 80% of the U.S. market capitalization.  The index's largest market capitalization is approximately $3.08 trillion, the smallest is around $5.33 billion, the mean market cap is $92.45 billion, and the median market cap is $34.85 billion (data as of May 31, 2024)

Information technology (IT) stocks have a significant presence in the S&P 500, with the top companies being tech giants like Microsoft, Apple, Nvidia, Amazon, and Meta (formerly Facebook). These companies reflect the growth drivers of the U.S. economy.

Top 10 Companies in the S&P 500 by Index Weight

Microsoft CorpMSFTInformation Technology
Apple Inc.AAPLInformation Technology
Nvidia CorpNVDAInformation Technology IncAMZNConsumer Discretionary
Meta Platforms, Inc. Class AMETACommunication Services
Alphabet Inc AGOOGLCommunication Services
Alphabet Inc CGOOGCommunication Services
Berkshire Hathaway BBRK.BFinancials
Eli Lilly & CoLLYHealth Care
JP Morgan Chase & CoJPMFinancials

*Based on GICS® sectors, as of May 31, 2024.

The companies in the index are primarily concentrated in three sectors: Information Technology (30.6%), Financials (12.9%), and Health Care (12.0%). These sectors represent significant drivers of economic growth and innovation.

Sectors of the S&P 500

SectorIndex Weight
Information Technology30.6%
Health Care12.0%
Consumer Discretionary9.9%
Communication Services9.3%
Consumer Staples6.0%
Real Estate2.2%

*Based on GICS® sectors, as of May 31, 2024.

How to Invest in S&P 500?

Investing in the S&P 500 is a strategic move that exposes you to a diverse range of prominent U.S. companies and can form the foundation of a well-rounded investment portfolio. Here’s how you can invest in the S&P 500 from Singapore:

Understanding the Investment Vehicles

#1 - Exchange-Traded Funds (ETFs)

ETFs are an efficient way to invest in the S&P 500. They are designed to mirror the performance of the index by holding the same stocks. ETFs are traded on stock exchanges, providing liquidity and ease of access. Popular S&P 500 ETFs include:

  • SPDR S&P 500 ETF Trust (SPY)
  • iShares Core S&P 500 ETF (IVV)
  • Vanguard S&P 500 ETF (VOO)
  • iShares Core S&P 500 UCITS ETF (CSPX)
  • Invesco S&P 500® Equal Weight ETF (RSP)

#2 - Mutual Funds

Mutual funds also track the S&P 500 but are structured differently from ETFs. They are typically purchased at the end of the trading day at the fund’s net asset value (NAV). Examples include:

  • Vanguard 500 Index Fund (VFINX)
  • Fidelity 500 Index Fund (FXAIX)

Selecting the ETF to invest in

With over 100 ETFs tracking the S&P 500, choosing the right one can be challenging. Here are the top ETFs to consider for Singaporean investors:

NameTickerFund ManagerExpense Ratio (Annual)Use of Income*Total Net Assets (in $B)
SPDR® S&P 500 ETF TrustSPYState Street Global Advisors0.09%Distributing533+
iShares Core S&P 500 ETFIVVBlackRock0.03%Distributing462+
Vanguard S&P 500 ETFVOOVanguard0.03%Distributing1140+
iShares Core S&P 500 UCITS ETFCSPXBlackRock0.07%Accumulating91+
Invesco S&P 500® Equal Weight ETFRSPInvesco0.20%Distributing55+

* as of 17 Jun, 2024

Local Option on the Singapore Exchange (SGX)

For those who prefer to avoid international markets, the S27 SPDR® S&P 500 ETF is available on the Singapore Exchange (SGX). This is the only local option for investing in an S&P 500 ETF.

Key Factors to Consider When Choosing an ETF

  • Expense Ratio: The expense ratio measures how much of a fund's assets are used for administrative and other operating expenses. Lower expense ratios are generally better for long-term investments. Typical S&P 500 ETFs have expense ratios ranging from 0.03% to 0.09%.
  • Liquidity: Higher liquidity ensures that you can buy and sell your ETF shares easily without significant price changes.
  • Dividend Withholding Tax: Singapore does not impose a withholding tax on dividends from locally listed ETFs. However, investing in U.S. ETFs incurs a 30% dividend withholding tax. Irish-domiciled ETFs offer a reduced 15% withholding tax due to tax treaties.
  • Foreign Currency Risk: Investing in ETFs denominated in foreign currencies exposes you to currency fluctuation risks.
  • Accumulating vs. Distributing ETFs: Accumulating ETFs reinvest dividends to increase the fund’s value, suitable for long-term growth. Distributing ETFs pay dividends to investors, providing a steady income stream.

Buying S&P 500 ETF

When it comes to investing in the S&P 500 from Singapore, investors have the option to choose between ETFs listed on the Singapore Exchange (SGX) and those listed on the New York Stock Exchange (NYSE). Each option comes with its own set of advantages and considerations, particularly in terms of trading volume, fund size, and investment platforms.

SGX-Listed S&P 500 ETF (Ticker: S27)

The S27 ETF, managed by State Street Global Advisors, is listed on the Singapore Exchange and provides a convenient option for local investors. One of the primary advantages of S27 is that it can be purchased using Supplementary Retirement Scheme (SRS) funds, which is not possible with most NYSE-listed ETFs. This feature makes it an attractive choice for Singaporean investors looking to utilize their SRS contributions.

However, it is important to note that the S27 ETF has a significantly lower trading volume compared to its counterparts on the NYSE. Lower trading volume can lead to wider bid-ask spreads, making transactions slightly more costly and potentially more difficult to execute at desired prices. Additionally, the minimum board lot size for S27 is 10 units, which may require a higher initial investment compared to NYSE-listed ETFs that typically have a minimum lot size of 1 unit.

NYSE-Listed S&P 500 ETFs

Investors also have the option to buy NYSE-listed S&P 500 ETFs, such as SPDR S&P 500 ETF Trust (SPY), iShares Core S&P 500 ETF (IVV), and Vanguard S&P 500 ETF (VOO). These ETFs are known for their high liquidity, with trading volumes in the tens of millions. The high liquidity of these ETFs ensures that investors can buy and sell shares easily with minimal price impact, benefiting from tighter bid-ask spreads.

NYSE-listed ETFs also tend to have lower minimum investment requirements, with most allowing purchases of as little as one share. This makes them more accessible to investors with smaller amounts of capital. Furthermore, while both SGX-listed and NYSE-listed ETFs are subject to the same 30% U.S. dividend withholding tax, investing through a platform like StashAway can offer additional benefits.

Investing through StashAway

StashAway provides a flexible and low-cost platform for investing in NYSE-listed ETFs. For example, investors can purchase the Vanguard S&P 500 ETF (VOO) through StashAway’s Flexible Portfolio, which features extremely low fees starting from just 0.3%. This platform offers a user-friendly experience, making it easy for investors to manage their portfolios and adjust their strategies as needed.

Additionally, StashAway supports the Supplementary Retirement Scheme (SRS). This means you can save on taxes and maximize your retirement savings by investing your SRS funds through StashAway.

Making the most out of your S&P 500 ETFs Investment

The S&P 500 has a strong track record of performance over the long term. Historically, it has averaged annual returns of about 10% before inflation. This makes it an attractive option for investors seeking steady growth and exposure to a diversified basket of the largest companies in the U.S. economy. Holding an S&P 500 ETF can provide you with exposure to sectors such as technology, healthcare, financials, and consumer goods, ensuring that your investment is spread across various industries.

Dollar-Cost Averaging

Dollar-cost averaging (DCA) is an investment strategy that involves regularly investing a fixed amount of money, regardless of the share price. This approach offers several advantages:

  • Mitigates Timing Risk: By investing consistently, you avoid the risk of making a large investment at a market peak.
  • Reduces Impact of Volatility: DCA spreads out your investments over time, which can reduce the impact of market volatility. You buy more shares when prices are low and fewer when prices are high, potentially lowering your average cost per share.
  • Disciplined Investment Approach: Regular investing helps build a disciplined approach, encouraging you to invest regardless of market conditions.

Reinvesting Dividends

Reinvesting dividends can significantly enhance your returns over time. Many S&P 500 ETFs offer dividend reinvestment plans (DRIPs), which automatically use the dividends paid out by the ETF to purchase additional shares. This can compound your returns, as the reinvested dividends themselves generate additional earnings.


While S&P 500 ETFs provide diversification within the U.S. market, consider diversifying your portfolio further by including stocks, bonds, and other asset classes. This broader diversification can help mitigate risks specific to the U.S. market and improve your overall risk-adjusted returns.

Tax-Efficient Investing

Consider the tax implications of your investments. For Singaporean investors, utilizing tax-advantaged accounts like the Supplementary Retirement Scheme (SRS) can provide significant tax savings. Investing your SRS funds in S&P 500 ETFs can help you grow your retirement savings more efficiently.

Keeping Costs Low

Minimizing investment costs is crucial for maximizing your returns. Pay attention to the expense ratios of the ETFs you choose, and opt for those with lower fees. Also, consider the trading fees charged by your brokerage and look for cost-effective options.

Why S&P 500 ETFs Are Ideal for Long-Term Wealth Growth

Investing in S&P 500 ETFs offers a robust and reliable pathway to long-term wealth growth. These ETFs provide diversified exposure to 500 of the largest and most influential companies in the U.S., spanning various sectors such as technology, healthcare, and finance. This diversification minimizes risk and capitalizes on the overall growth of the U.S. economy.

The historical performance of the S&P 500, with average annual returns of around 10%, underscores its potential for steady growth. By employing strategies like dollar-cost averaging, investors can further mitigate market volatility and enhance their positions over time. Reinvesting dividends compounds returns, while regular portfolio reviews and tax-efficient investing ensure alignment with financial goals and maximize tax advantages.

With low expense ratios and high liquidity, S&P 500 ETFs are a cost-effective investment tool. Whether you are a novice investor or an experienced one, S&P 500 ETFs can serve as a cornerstone of your investment portfolio, driving long-term wealth accumulation and financial stability.

Embrace the opportunities presented by S&P 500 ETFs and embark on a journey toward achieving your long-term financial goals.

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