Happy Birthday to SPY – the SPDR S&P 500 exchange-traded fund. This was the very first ETF, and it is still the largest. It turns 25 years old today (January 22nd), and can now officially rent a car. We cannot be thankful enough for this innovation. It has helped to significantly drive the cost of investing downward, thereby allowing the average investor to keep much more of their money every year. According to the Investment Company Institute, the sales-weighted average of total shareholder costs for individual equity funds was 1.65% in 1993. The current cost of SPY is 0.09%, and while costs on everything have dropped, it was the advent of cheaper exchange-traded funds and low-cost index funds that forced costs lower.
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