Microsoft ranks as the second largest company in the world by market cap with a value of about $3 trillion, according to Motley Fool, so the tech giant has no shortage of investors. All of this money pouring in has pushed Microsoft’s stock price to about $410 a share — which means you need a couple thousand dollars just to buy a handful of shares.
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If you’d rather not spend that much, there are other investment options. Here are three ways you can invest in Microsoft.
Buy The Stock
The most direct way to invest in Microsoft is to purchase shares of its stock. You’ll need to do this through a brokerage account, so it’s important to compare various features, fees and options before choosing a broker.
You’ll need to create an order ticket before trading the stock, which lets you specify whether to place a limit order or a market order. Limit orders only trade when the stock hits your specified price. With a market order, you buy or sell the stock at its current price. After that, you can decide how many Microsoft shares you want to purchase.
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Invest in a Mutual Fund
An indirect way to invest in Microsoft is through a mutual fund that owns the company’s shares. The main advantage of this option is that you have more control over the amount of money you invest. That’s not the case with buying the stock directly because you have to invest a specific amount for each share.
To invest in a mutual fund, you’ll need to either open a new account or add money to an existing account at a brokerage that offers mutual funds. In this case, you’ll want to find funds with large positions in Microsoft. Next, you’ll select the amount that you want to invest in one or more funds and set up trades with your broker.
Here are the top five traditional mutual fund holders of Microsoft (excluding exchange-traded funds), according to Yahoo Finance data compiled late last year.
- Vanguard Total Stock Market Index Fund
- Vanguard 500 Index Fund
- Fidelity 500 Index Fund
- Vanguard Growth Index Fund
- Vanguard Institutional Index Fund-Institutional Index Fund
Invest in an ETF
An exchange-traded fund (ETF) is a kind of hybrid investment that combines features of both individual stocks and mutual funds. It’s similar to a mutual fund in that it invests in a basket of stocks, but it trades on stock exchanges whenever the markets are open, just like stocks. Most ETFs are passively managed and track a particular index.
Microsoft trades on several stock market indexes — including the S&P 500 and Dow Jones Industrial Average — so you’ll want to invest in an ETF that tracks those indexes.
Here were the five ETFs with the most shares of Microsoft as of mid-2024, according to ETF.com data cited by Motley Fool:
- SPDR S&P 500 ETF Trust (NYSEMKT: SPY)
- Invesco QQQ Trust (NYSEMKT: QQQ)
- iShares Core S&P 500 (NYSEMKT: IVV)
- Vanguard S&P 500 ETF (NYSEMKT: VOO)
- Vanguard Total Stock Market ETF (NYSEMKT: VTI)
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This article originally appeared on GOBankingRates.com: 3 Ways You Can Invest In Microsoft
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