SPY is an exchange-traded fund (ETF) that tracks the performance of the S&P 500 index, which includes 500 of the largest publicly traded companies in the United States. It allows investors to gain exposure to a diverse range of sectors, including technology, healthcare, and finance, without having to buy individual stocks. Launched in 1993, SPY is one of the most popular ETFs in the world, known for its liquidity and low expense ratio. Investors use SPY to diversify their portfolios and hedge against market volatility, making it a common choice for both individual and institutional investors.