World's First ETF Turns 30, Here's How Much Money You'd Have If You Invested $1,000 When It Launched

The SPDR S&P 500 ETF Trust SPY, the first U.S.-based exchange-traded fund, was launched 30 years ago this week. In the past three decades, State Street's so-called "Spider" fund has grown to become the world's largest ETF and one of the most popular ways for investors to make diversified bets on the S&P 500.

SPY Origins: After nearly three years of deliberation on State Street's application, the U.S. Securities and Exchange Commission finally approved the SPY fund for trading, and the fund launched with just $6.5 million in seed funding on Jan. 22, 1993. The fund's initial market reception was so poor that State Street and the American Stock Exchange initially even considered closing the fund. Fortunately, Wall Street eventually warmed up to ETFs, and the fund exceeded $1 billion in assets within three years of its launch. Today, the SPY fund has grown to manage $371 billion in assets. In 2022, the SPDR fund generated an average daily trading volume of $39 billion.

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Over the years, the success of the SPY fund inspired competing funds that are currently among the largest and most popular in the market, including the Vanguard 500 Index Fund ETF VOO and the iShares Core S&P 500 ETF IVV.

SPY Performance: The SPY fund is designed to track the popular S&P 500 stock market index, and its holdings replicate the weightings of the S&P 500. The fund has a price target of 10% of the value of the S&P 500. Today, its top holdings are Apple, Inc. AAPL, Microsoft Corp MSFT and Alphabet, Inc. GOOG GOOGL. The fund also currently pays a 1.73% dividend.

Since its inception, the SPY fund has generated an average annual total return of 9.53%.

In the past 30 years, the price of the SPY fund has climbed from around $43.61 to $400.93. In fact, $1,000 invested in the SPY fund when it launched in January 1993 would be worth about $17,437 today, assuming reinvested dividends.

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