The First ETF Ever Created Just Turned 33. Here Is Why It Is Still One of the Most Powerful Investment Available

Launched on January 22, 1993, SPY (State Street SPDR S&P 500 ETF Trust) is now over 33 years old and still going strong. It is no longer the largest ETF, but remains a titan with roughly $651 billion in assets under management (AUM). In terms of liquidity, it is in a league of its own.

According to State Street Investment Management, as of March 23, the fund traded about 29 million shares in a single day, with an incredibly tight 0.01% 30‑day median bid‑ask spread. It also offers zero‑day‑to‑expiry (0DTE) options, a trading efficiency hard to replicate.

Although SPY isn’t perfect, its 0.0945% expense ratio is low, yet newer competitors have pushed fees down to the 0.02%–0.03% range. Moreover, its unit investment trust structure means that between its quarterly distribution dates, SPY cannot reinvest dividends from the underlying S&P 500 companies; instead, it holds that cash, creating a modest drag on performance over time.

Even so, if you already own SPY, there’s little reason to sell just to chase a slightly cheaper alternative and trigger capital gains taxes. Despite its quirks, SPY still offers something that few investments can match—it remains one of the simplest, most efficient, and most powerful ways to build long‑term wealth.

指數的韌性

Many investors think the S&P 500 is simply a list of the 500 largest companies in the United States. That’s an oversimplification. In reality, the index is governed by rules around market capitalization, liquidity, and earnings consistency.

Companies generally need to be profitable, widely traded, and of sufficient size to qualify. On top of that, there’s a committee that makes final decisions on additions and removals, which adds a layer of discretion. That makes the index more curated than many realize.

The biggest advantage, though, is its market‑cap‑weighted structure. Each company’s weight is determined by its share price multiplied by its free‑float shares outstanding. Over time, this creates a self‑cleansing mechanism: companies that perform well naturally grow into larger positions, while those that struggle shrink in importance or get removed entirely.

It’s a built‑in momentum effect, but without the higher costs typically associated with dedicated momentum strategies. Over long periods, this has been incredibly effective. Data from testfolio.io shows that over a 33‑year period with dividends reinvested and before taxes, SPY compounded at 10.47% annually. A $10,000 investment would have grown to more than $271,240.

Of course, that return didn’t come without risk. Annualized volatility was about 18.6%, and during the 2008 financial crisis the fund experienced a peak‑to‑trough drawdown of 55.2%. But for investors who held through those periods, the long‑term outcome was still highly favorable.

SPIVA的啟示

The backtest looks strong, but it becomes even more meaningful when compared to alternatives. There’s no shortage of actively managed funds that attempt to outperform the S&P 500 through stock picking. In theory, skilled managers should be able to add value.

In practice, most don’t. The S&P Indices Versus Active (SPIVA) study tracks how active funds perform against their benchmarks. As of December 31, 2025, the data shows that over a 15‑year period, 89.93% of large‑cap funds underperformed the S&P 500.

That leaves just 10.07% that managed to outperform over that timeframe. Shorter periods can be more variable, but over the long term, the odds are clear: most active managers fail to beat a simple, low‑cost index approach.

SPY的最終結論

Is SPY perfect? No. There are valid reasons to consider alternatives, including its slightly higher expense ratio and the small cash drag from its unit investment trust structure.

But those drawbacks are relatively minor in the bigger picture. If you do end up investing in SPY, you’re still owning one of the most effective long‑term wealth‑building tools available.

You can also build around it. Adding international equities can improve diversification. Including bonds can help manage volatility if your risk tolerance is lower or your time horizon is shorter. And if you own 100 shares, you can even layer on strategies like covered calls to generate additional income, with the trade‑off of capping some upside.

That flexibility is part of what makes SPY so powerful. Even after more than three decades, it remains one of the most widely traded and widely held ETFs in the world for a reason.

分析師觀點

以我多年的市場經驗來看，雖然 newer ETFs offer lower fees, SPY仍具不可替代的流動性與透明度，適合作為投資組合的核心持倉。若你願意承擔少量的現金拖曳，仍建議保留或新增SPY作為長期財富增長的基石。