Could iShares S&P 500 ETF (ASX: IVV) be classified as the best long-term investment idea?
To own something for the truly long-term you'd want to make sure you could own it through good times and bad times. That's partly why I think it's quite difficult to keep a high-conviction mindset with many shares – it's hard to predict what their future looks like.
But exchange-traded funds (ETFs) can help us through this problem by owning a large group of businesses in a single investment, so we don't see the individual volatility.
The iShares S&P 500 ETF could be one of the best options because it owns 500 businesses that are listed in the US, some of them being the best in the world.
The S&P 500 has been around for decades and the holdings regularly change. The poor performers are removed and the new rising businesses take their place. The long-term compounding machines like Microsoft and Berkshire Hathaway continue to get bigger and bigger.
There are plenty of other great holdings at the top of the exposure list which benefit from enormous networks effects like Alphabet, Facebook, Amazon, Visa and MasterCard.
This ETF makes more sense to me than an ASX-focused one. Much of the underlying dividends and profit generated by these US-based holdings are in-fact global, from many areas of the world. That makes them a much better investment proposition than businesses just in Australia and New Zealand.
One of the most attractive things about the iShares S&P 500 ETF is its incredibly-low annual management fee of only 0.04%. This is almost nothing, leaving more of the returns in the hands of shareholders. This makes a big difference over the long-term.
Foolish takeaway
Warren Buffett advocates for ordinary (American) people to own the S&P 500. If I could only own one investment I'd be very happy for it to be the iShares S&P 500 ETF, but I think there are plenty of opportunities that are better priced at the moment.
