S&P 500 or Nasdaq 100? Best ETFs for Investing in the US Stock Market

In the last 12 months, the Nifty 50 has declined by about 7%, while the S&P 500 has surged nearly 24%. Additionally, the Indian Rupee’s depreciation against the US Dollar has boosted returns for Indian investors investing in US stocks.

A great way to invest in the US market from India is through Exchange-Traded Funds (ETFs). These funds offer a mix of index fund benefits and stock trading flexibility, allowing investors to track major indices at lower costs.

ETFs for Exposure to the US Market

S&P 500 Index ETF

The S&P 500 index tracks the top 500 US companies, covering nearly 80% of the US stock market. Investing in an S&P 500 ETF provides a low-cost, highly liquid way to diversify with large US stocks instead of picking individual companies.

Top stocks in S&P 500: Apple, NVIDIA, Microsoft, Amazon, Meta, Alphabet, Tesla, and Berkshire Hathaway.

Some popular S&P 500 ETFs with low expenses and good returns include:

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

The SPDR S&P 500 ETF (SPY) is the world’s oldest and largest ETF, with an expense ratio of just 0.0945%, making it an attractive long-term investment.

Nasdaq 100 ETF

The Nasdaq 100 is the top benchmark index for tech stocks, including major global tech giants such as Nvidia, Apple, Amazon, Meta (Facebook), Alphabet (Google), and Tesla.

Investors can gain exposure to these tech stocks through the Invesco QQQ ETF, which has an annual expense ratio of 0.20%. This ETF is ideal for those looking to invest in global technology leaders.

Dow Jones Industrial Average (DJIA) ETF

The DJIA (Dow Jones Industrial Average), or Dow 30, represents 30 leading US companies and is a key indicator of the US economy and consumer trends.

The SPDR Dow Jones Industrial Average ETF Trust (DIA) allows investors to replicate the Dow’s performance, making it a solid choice for those looking to invest in established US companies.

Why Consider US ETFs?

Diversification is important for any investment strategy, especially in global markets. The US economy remains the world’s largest, and investing in ETFs allows investors to benefit from its growth.

Before investing in ETFs, it’s important to check factors such as:

•  Expense Ratio
•  Long-term Performance
•  Liquidity
•  Tracking Error
•  Price-to-NAV Difference
•  Dividend Yield

By carefully selecting ETFs, investors can gain exposure to the US stock market with lower costs and reduced risk while benefiting from global economic trends.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.

Investments in the securities market are subject to market risks, read all the related documents carefully before investing.