The Smartest S&P 500 ETF to Buy With $1,000 Right Now

The S&P 500 (SNPINDEX: ^GSPC) remains one of the most reliable long-term investment strategies. By investing in many of the largest and most successful companies in the world, investors can invest in the long-term U.S. economic growth engine. Over the past century, the index has an average annual return of around 10%.

There are four major ETFs that invest in the S&P 500:

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State Street SPDR S&P 500 ETF (NYSEMKT: SPY)

State Street SPDR Portfolio S&P 500 ETF (NYSEMKT: SPYM)

At a high level, all of them are pretty indistinguishable. They all have ultra-low expense ratios and their performance records are virtually identical. To find any kind of distinction between them, you really need to dig into the details and look under the hood.

For many investors, any one of these ETFs will do. But one has a very slight advantage over the others.

When comparing funds that track the same index, the biggest differentiator usually comes down to cost. All else being equal, the fund with the lowest fees usually comes out on top because that delivers the best total return for shareholders.

That principle ends up being the case here, too.

Data sources: ETF fact sheets, ETF Action.

The expense ratio is what the fund issuer charges to run the fund. The spread is the trading cost incurred whenever a trade is made. The total cost is simply a combination of the two.

The State Street SPDR S&P 500 ETF is the most heavily traded ETF in the world and is favored by large institutions and brokerages. But it has the highest expense ratio of the bunch.

The State Street SPDR Portfolio S&P 500 ETF could be considered the lower-cost version built for investors looking to minimize fees.

The Vanguard S&P 500 ETF and the iShares Core S&P 500 ETF sit in between with identical 0.03% expense ratios.

But it's SPYM that's the low-cost leader. The 0.02% expense ratio gives the fund a razor-thin advantage on fees. Given that trading spreads are almost non-existent for all four ETFs, this fund is the choice for investors who want to take trading costs as low as possible.

Granted, a 1 basis point cost savings won't be a meaningful difference, but if you can get it, why not take it? The State Street SPDR Portfolio S&P 500 ETF wins as the lowest-cost option for investing in the S&P 500.

Before you buy stock in State Street SPDR Portfolio S&P 500 ETF, consider this:

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David Dierking has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Vanguard S&P 500 ETF. The Motley Fool has a disclosure policy.

The Smartest S&P 500 ETF to Buy With $1,000 Right Now was originally published by The Motley Fool