Happy Birthday S&P 500 SPY ETF! If You Invested $1,000 In SPY At Launch, Here's How Much You'd Have Today

The first U.S-based exchange-traded fund celebrates another birthday Monday and remains one of the most popular ETFs today.

Here's a look at the history of the SPDR S&P 500 ETF Trust SPY and how much an investment at launch would be worth today.

What Happened: Launched with seed funding of $6.5 million, the SPDR S&P 500 ETF Trust became the first U.S. ETF on Jan. 22, 1993.

The ETF was approved by the U.S. Securities and Exchange Commission several years after State Street Corp. STT applied for the fund.

Initial interest in the ETF was poor and the fund was almost closed before investors came around to the idea of using ETFs as investment vehicles.

The success of the SPY ETF led to other financial institutions launching similar ETFs that track the S&P 500 Index, one of the largest and most well-known stock market indexes.

The iShares Core S&P 500 ETF IVV and Vanguard S&P 500 Index Fund ETF VOO launched in 2000 and 2010, respectively.

Today, the three ETFs that track the S&P 500 are the largest in the world according to ETFDB with the following assets under management:

SPY: $474 million

IVV: $405 million

VOO: $377 million

After posting its worst one-year performance in more than a decade for the 2022 year, the S&P 500 Index, which features 500 leading U.S. publicly traded companies, with a primary emphasis on market capitalization, saw outperformance in 2023, ending the year up over 20% and riding a streak of winning weeks.

Last week, the S&P 500 hit a new all-time high, boosted by soaring valuations for technology stocks, particularly those with increased exposure to the growing artificial intelligence segment.

Here are the current top holdings of the SPDR S&P 500 ETF at the time of writing:

1. Microsoft Corp MSFT: 7.3%
2. Apple Inc AAPL: 6.9%
3. Alphabet Inc GOOGGOOGL: 3.9%, both classes of stock
4. NVIDIA Corp NVDA: 3.6%
5. Amazon.com, Inc. AMZN: 3.5%

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Investing $1,000 in SPY Stock: While the idea of ETFs was new at the time, investors who followed State Street into the idea of a new investment vehicle to track the S&P 500 would have been pleasantly rewarded.

The SPDR S&P 500 ETF traded at around $43.61 in its first days of trading. A $1,000 investment could have purchased 22.93 shares at the time.

The $1,000 investment would be worth $11,087.34 today based on a price of $483.53 for the SPY at the time of writing. This represents a hypothetical return of $1,008.7% over the past 31 years.

Investors who bought the SPY on Jan. 22, 1993, based on a price of $25.02 adjusted for dividends would have an even larger return. The SPY has an adjusted price of $25.02 when adjusted for dividends, which means a $1,000 investment could have purchased 39.97 shares.

The $1,000 investment would be worth $19,326.69 today. This represents a hypothetical return of 1,932.7% over the past 31 years.

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