The S&P 500 Index (INDEXSP: .INX) has been a strong performer over the long-term. We shouldn't judge a market or investment too much based on a short time frame, which I'd describe as anything less than a year.
The S&P 500 is one of the most popular indices from across the world because many of the largest (and strongest) global companies are listed in the US.
In this index, we can find 500 of the largest and most profitable businesses listed in the US share market, such as Nvidia, Apple, Microsoft, Amazon, Alphabet, and Meta Platforms.
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How strongly has the S&P 500 Index performed in 2026?
At the time of writing, the S&P 500 Index has risen by 7.2% in 2026 to date. That compares very favourably to the S&P/ASX 200 Index (ASX: XJO), which has only risen by 0.4% in 2026 to date.
As you might expect, the gains in the US share market have largely been driven by a very small number of businesses.
In 2026 to date:
- The Nvidia share price is up 2% (it's down 18% from mid-May)
- The Apple share price is up 4.7%
- The Microsoft share price is down 21%
- The Amazon share price is up 2.7%
- The Alphabet share price is up 6.1%
- The Meta Platforms share price is down 15%
- The Broadcom share price is up 5%
- The Micron Technology share price is up 259%
- The Advanced Micro Devices share price is up 133%
It is very interesting to me that names like Microsoft and Meta Platforms have suffered major declines, and Nvidia has given up much of its 2026 gains, while others in the tech space have soared.
How can Australian investors get exposure to this index?
The easiest way for Aussies to buy into the S&P 500 is through the iShares S&P 500 ETF (ASX: IVV). It's one of the cheapest exchange-traded funds (ETFs) on the ASX with an annual management fee of just 0.04%.
The fund's performance has been excellent, thanks to the businesses it holds. Over the past decade to 31 May 2026, the IVV ETF has averaged an annual return of 15.5%.
I'm not expecting the next five and ten years to be as good as that because of how reliant those returns were on a few tech names.
It becomes increasingly difficult to continue growing earnings at a strong pace when you're talking about businesses with market capitalisations of more than US$1 trillion. Plus, it's an intriguing development that the index is becoming more concentrated on the top ten names.
However, great companies do manage to continue growing their earnings. So, aside from the complexity of the huge spending on AI, I think the outlook for the S&P 500 looks compelling.
