SPY ETF Review: Is SPDR S&P 500 ETF Worth Buying?

SPDR S&P 500 ETF Trust is the world's most heavily traded ETF with over $500 billion in AUM, serving as the benchmark equity allocation and the reference point against which all Energy Macro real asset and commodity strategies are measured for relative performance.

Last updated: 2026-02-02 · Data: Yahoo Finance, fund prospectuses, SEC filings

What Is SPY?

SPY tracks the S&P 500 Index, holding the 500 largest U.S. companies weighted by market capitalization. Managed by State Street Global Advisors, it's the oldest and most liquid ETF in the world, launched in 1993. While not a real asset play, SPY serves as the benchmark against which all other strategies should be measured.

Key Stats: 0.0945% expense ratio | $712B AUM | Inception: January 1993

Current Snapshot

Why It Matters for Real Asset Investors

SPY represents the opportunity cost of every allocation decision. When you buy energy infrastructure, commodity producers, or REITs, you're saying those assets will outperform the broad market. History shows this happens in specific regimes—particularly during inflationary periods, dollar weakness, and late-cycle growth—but SPY dominates during disinflationary growth phases.

The current composition tells the story: nearly 40% of SPY sits in technology and communication services, with mega-cap AI plays like NVIDIA (7.7%) and Microsoft (6.1%) driving returns. This concentration makes SPY vulnerable to tech corrections but powerful during innovation cycles. For real asset investors, SPY performance often moves inversely to commodities and infrastructure—when growth slows and inflation rises, defensive real assets shine while growth stocks struggle.

Understanding SPY's regime dependency is crucial. The ETF thrives in low-inflation, high-growth environments where earnings expansion drives multiple expansion. It struggles when nominal growth matters more than real growth—exactly when real assets typically outperform.

Top Holdings

NVIDIA Corp (7.7%) - The AI infrastructure kingpin, though semiconductor cycles create volatility

Apple Inc (6.9%) - Consumer technology giant with services transition providing stability

Microsoft Corp (6.1%) - Cloud and AI productivity leader with recurring revenue model

Amazon.com Inc (3.8%) - E-commerce and cloud computing giant with logistics dominance

Alphabet Class A (3.1%) - Search monopoly transitioning to AI while maintaining advertising stronghold

Broadcom Inc (2.8%) - Semiconductor and software infrastructure play

Meta Platforms (2.5%) - Social media advertising duopoly with VR/AR optionality

Tesla Inc (2.2%) - Electric vehicle leader, though valuation remains elevated

Berkshire Hathaway Class B (1.6%) - Buffett's conglomerate providing diversification within SPY

The top 10 holdings represent over 36% of the fund, creating significant concentration risk in mega-cap growth names.

How It Fits the Portfolio

SPY serves as the baseline allocation for any portfolio construction exercise. In a balanced real asset strategy, SPY might represent 20-40% of total holdings, providing liquidity and growth exposure while real assets handle inflation protection and income generation. The key is dynamic rebalancing—reducing SPY exposure when real asset regimes appear favorable, then rotating back during disinflationary growth periods.

Position sizing depends on your conviction about future regimes. Higher SPY allocations make sense when deflation risks dominate and technological innovation drives productivity gains. Lower allocations favor environments where physical scarcity, infrastructure constraints, and monetary debasement create tailwinds for hard assets.

Regime Signals

SPY outperforms during periods of falling interest rates, low inflation expectations, and strong corporate earnings growth. The 2010-2021 period exemplified this regime—central bank accommodation, technological disruption, and globalization created ideal conditions for growth stock leadership.

The ETF struggles when bond yields rise faster than earnings growth, commodity prices spike, or geopolitical tensions disrupt global supply chains. Currency debasement also challenges SPY's purchasing power, as dollar-denominated stock prices may rise nominally while losing ground to real assets internationally.

Watch for regime shifts around Federal Reserve policy transitions, commodity super-cycles, and infrastructure investment waves. When these catalysts align, real assets often outperform SPY by significant margins, making tactical rebalancing profitable for patient investors.

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Frequently Asked Questions

Why does Energy Macro track SPY?

SPY represents the default investment choice for most capital allocators — the S&P 500 index. Every Energy Macro strategy must justify its existence by offering either higher returns, lower drawdowns, or better risk-adjusted performance than simply holding SPY. By including SPY in the framework, Energy Macro provides a transparent benchmark that lets investors see whether real asset allocation is adding value versus the conventional equity-dominated approach.

What is the expense ratio of SPY?

SPY charges 0.0945% annually, making it one of the cheapest equity ETFs available. Even lower-cost S&P 500 alternatives exist — VOO (0.03%) and IVV (0.03%) — but SPY's unmatched liquidity, options depth, and institutional adoption make it the standard for active traders and large allocators. For buy-and-hold investors, VOO or IVV may be marginally more cost-efficient.

How does the S&P 500 relate to the Energy Macro thesis?

The Energy Macro thesis argues that the S&P 500's dominance has been driven by a disinflationary, financialized regime that is ending. As real assets (energy, commodities, infrastructure) outperform financial assets (tech, growth stocks) in an inflationary regime, the traditional 60/40 portfolio anchored by SPY may underperform real-asset-heavy allocations. SPY remains in the framework to test this thesis against reality.

Should I replace SPY with Energy Macro ETFs?

Energy Macro does not advocate abandoning equity exposure entirely. Rather, the framework suggests rebalancing from an overweight in financial-economy stocks toward real-economy assets. A portfolio might shift from 60% SPY / 40% bonds to 30% SPY / 40% real assets (energy, commodities, infrastructure) / 20% bonds / 10% alternatives. The right allocation depends on your conviction in the inflationary regime thesis and your risk tolerance.

For our complete allocation framework across real assets, infrastructure, and income strategies, see The Blackout Fortune Playbook.

Last updated: February 1, 2026 | Data: Yahoo Finance, State Street Global Advisors