I don't quite understand the purpose of SPY (SPDR S&P 500 ETF Trust) and other S&P500 ETF.
If SPY is designed to track the performance of S&P500,
why not just buy S&P500(like index CFD) ?
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The S&P500 is an index, not an investment by itself. The index lists a large number of stocks, and the value of the index is the price of all the stocks added together.
If you want to make an investment that tracks the S&P500, you could buy some shares of each stock in the index, in the same proportions as the index. This, however, is impractical for just about everyone.
Index mutual funds provide an easy way to make this investment. SPY is an ETF (exchange-traded mutual fund) that does the same thing.
An index CFD (contract for difference) is not the same as an index mutual fund. There are a number of differences between investing in a security fund and investing in a CFD, and CFDs are not available everywhere.