If you’re looking to invest in the S&P 500 and the US stock market from Australia, then you’ve come to the right place.

In this article, you’ll understand the S&P 500 and how to invest in it from the comfort of your home in Australia.

Disclaimer

Before you continue reading this article, it’s important to note that this is general financial advice NOT personal financial advice. If you’re looking for personal advice, you should reach out to a financial advisor. 

Invest with Queenie has had a long-standing partnership with Pearler, one of Australia’s largest investing apps. Later in this article you’ll get guided steps on how to invest in the S&P 500 using Pearler. 

🤔What is the S&P 500

So, you’ve probably heard of the term “the S&P 500” before, but what is it?

Simply put, it’s a list of America’s top 500 companies, and it represents 80% of the total US stock market.

Diversification

Investing in the S&P 500 is a popular choice because you get diversification. You’re not just betting on one company; you’re investing in a mix of different companies in tech, healthcare, and finance.

Low Effort

It’s also low effort because, with ETFs, you don’t have to spend time picking individual stocks.

Long-term Performance

It’s had great long-term performance since its inception.

Fun Fact

Even Warren Buffett, who is one of the richest people in the world, is a fan of the S&P 500. He’s even directed that 90% of his wealth be invested in the S&P 500 after he’s gone.

“The trick isn’t picking the right company,” Buffett says, “It’s buying all the big ones consistently and cheaply”.

So, if it’s good enough for one of the best investors in the world, then it’s worth a thought, right?

📈How to invest

Now, let’s get practical.

How can you invest in the S&P 500 from Australia?  

There are three main ways.

ETFs on the ASX

The first one is by getting an ETF on the ASX, which stands for the Australian Stock Exchange. You can look for options like IVV or SPY on the ASX. These are Australian-listed ETFs that track the performance of the S&P 500, allowing you to invest in Australian dollars without any extra foreign exchange fees.

Fun fact: did you know that IVV is the second most popular ETF among Pearler investors?

U.S. Market Access

The second way is by buying an ETF on the US stock market. Platforms like Pearler give you direct access to the US stock exchange, so you can buy options like VOO or SPY (the US versions).

The only downsides are that you will need to fill out a W-8BEN form for tax purposes, and you will be investing in USD, so you’ll need to pay currency exchange fees to convert your Australian dollars into US dollars.

Managed Funds

These are easy to use but usually come with higher fees compared to ETFs.

🧐ETF comparison

Let’s do a comparison of the most popular S&P 500 ETFs. We’ll be comparing IVV, VOO, and SPY.

🔎Other ETFs

Here are some other options to invest in the US stock exchange that aren’t S&P 500 ETFs, just so that you have some different options.

How to invest with Pearler

So now that we know some different ETF options, here’s how you can invest step by step using Pearler:
1. First, just go into the Pearler app and then click on “Invest in AU Shares.” I’m going to invest in IVV.
2. Here, it has more information about this ETF, and to buy it, I simply click “Buy.”
3. I can put in how much I would like to invest e.g. $1,000 and then to buy it, I simply click on “Next” and then “Place Order.”
4. You can even invest in US ETFs with Pearler. To buy a US ETF, I simply click on “Invest in US Shares.”
5. Here, I can search for the ETF I would like to buy—for example, VOO. Simply click on “Buy” and then “Place Order.”

🥳Get Investing

So glad you could stick around to the end! I hope this article helped you understand the S&P 500. But most importantly, it inspired you to start investing! 

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