SPDR S&P 500 (NYSEArca: SPYhas gained about 12% year-to-date, and is considered to be a broad market proxy for investors who want U.S. stock market exposure. The classic fund is also the first ETF that was created and launched by State Street Global Advisors.

“The S&P 500 returned 6.3% over the past decade on an annualized basis. That anemic return came with incredible ups and downs, while safer bonds offered a 5.7% return with substantially less volatility over the same period. At this point, the outlook for stocks has improved. The S&P 500 in early 2012 is trading at the same level it hit in 1999. Yet the underlying companies have grown considerably over the trailing decade. Profits in 2012 are expected to reach record levels,” Michael Rawson wrote for Morningstar. [Are Stock ETFs Still Cheap After the Rally?]

SPY has demonstrated strong, long-term success since it was launched in 1993. The fund doubles as a one-shot investment vehicle to gain exposure to the S&P 500, but also gives overseas exposure because most of the large-cap companies represented are multi-national corporations, reports Tom Taulli for InvestorPlace.

The market-cap weighted index is filled with companies that every investor is familiar with. Coca-Cola (NYSE: KO), McDonalds (NYSE: MCD) and Exxon Mobile (NYSE:XOM) are just a few. [Index ETFs: Is Buy and Hold Dead?]

Similar to the S&P 500 Index, SPY has a dividend yield of 2%. The average daily trading volume is at 135 million, and assets under management are around. The expense ratio is at 0.9%, hard to beat if investors are snatching up the same single stocks. The fund touts superior liquidity and low bid/ask spreads.

The major headwinds SPY is up against are the U.S. Presidential election this year, and the budget deficits that are plaguing nations around the globe. [Surveying S&P 500 Index ETFs]

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