What ETF consistently beat the market?
MarketWatch spotlights
It's not easy to beat the market over time, but Buffett has, and so have certain ETFs. You can boost your chances for outperformance without adding tremendous risk by investing in a growth ETF like Vanguard's. The Vanguard Growth ETF tracks the CRSP US Large-Cap Growth Index.
- Simplify Interest Rate Hedge ETF (PFIX)
- VanEck Semiconductor ETF (SMH)
- Amplify U.S. Alternative Harvest ETF (MJUS)
- AdvisorShares Pure U.S. Cannabis ETF (MSOS)
- YieldMax NVDA Option Income Strategy ETF (NVDY)
- ProShares Bitcoin Strategy ETF (BITO)
- Grayscale Bitcoin Trust (GBTC)
| Fund | 2023 performance (%) | 5yr performance (%) |
|---|---|---|
| MS INVF US Insight | 52.26 | 34.65 |
| Sands Capital US Select Growth Fund | 51.3 | 76.97 |
| Natixis Loomis Sayles US Growth Equity | 49.56 | 111.67 |
| T. Rowe Price US Blue Chip Equity | 49.54 | 81.57 |
The answer: RSP has outperformed the S&P 500 by 0.57% on an annualized basis since the ETF's inception two decades ago. Source: Morningstar Direct. Data begins at RSP inception date of April 24, 2003, through September 30, 2023.
Visit your My NerdWallet Settings page to see all the writers you're following. RDIV and SPYD have some of the highest yields of any high-dividend ETF. It's possible to live off the income from high-dividend ETFs, but it may take some planning.
ETFs can be a great investment for long-term investors and those with shorter-term time horizons. They can be especially valuable to beginning investors. That's because they won't require the time, effort, and experience needed to research individual stocks.
| Symbol | Name | Dividend Yield |
|---|---|---|
| SDIV | Global X SuperDividend ETF | 12.02% |
| QYLD | Global X NASDAQ 100 Covered Call ETF | 11.98% |
| BTF | Valkyrie Bitcoin and Ether Strategy ETF | 11.92% |
| FTQI | First Trust Nasdaq BuyWrite Income ETF | 11.89% |
| ETF | Assets Under Management | Expense Ratio |
|---|---|---|
| Invesco QQQ Trust (QQQ) | $254 billion | 0.20% |
| Vanguard Information Technology ETF (VGT) | $70 billion | 0.10% |
| VanEck Semiconductor ETF (SMH) | $16.3 billion | 0.35% |
| Invesco S&P MidCap Momentum ETF (XMMO) | $1.6 billion | 0.34% |
- 10-year return: 24.37%
- Assets under management: $10.9B.
- Expense ratio: 0.35%
- As of date: November 30, 2023.
Has anyone outperformed the S&P 500?
As of Q2 2023, Linde plc (NYSE:LIN) shares were held by 70 of the 910 hedge funds tracked by Insider Monkey, valued at $4.6 billion. This makes Linde plc (NYSE:LIN) the most commonly owned stock by hedge funds on our list of 13 stocks that outperform the S&P 500 every year for the last 5 years.
I put my personal 401(k) and a lot of my mutual fund investing in four types of mutual funds: growth, growth and income, aggressive growth, and international. I personally spread mine in 25% of those four. And I look for mutual funds that have long track records that have outperformed the S&P.
What do analysts say about VOO? VOO's analyst rating consensus is a Moderate Buy. This is based on the ratings of 505 Wall Streets Analysts.
SPY, VOO and IVV are among the most popular S&P 500 ETFs. These three S&P 500 ETFs are quite similar, but may sometimes diverge in terms of costs or daily returns.
The Direxion Daily S&P 500® Bull 2X Shares seeks daily investment results, before fees and expenses, of 200% of the performance of the S&P 500® Index.
Rowe Price U.S. Equity Research fund (ticker: PRCOX) is in this exclusive club, having bested—along with a team of about 30 research analysts—the S&P 500 index for the past five years on an annualized basis. U.S. Equity Research is a Morningstar five-star gold-medal fund.
Once you have $1 million in assets, you can look seriously at living entirely off the returns of a portfolio. After all, the S&P 500 alone averages 10% returns per year. Setting aside taxes and down-year investment portfolio management, a $1 million index fund could provide $100,000 annually.
Q: How does the wash sale rule work? If you sell a security at a loss and buy the same or a substantially identical security within 30 calendar days before or after the sale, you won't be able to take a loss for that security on your current-year tax return.
Investing in the stock market is one of the most effective ways to generate long-term wealth, and you don't need to be an experienced investor to make a lot of money. In fact, it's possible to retire a millionaire with next to no effort through exchange-traded funds (ETFs).
ETFs are subject to market fluctuation and the risks of their underlying investments. ETFs are subject to management fees and other expenses. Unlike mutual funds, ETF shares are bought and sold at market price, which may be higher or lower than their NAV, and are not individually redeemed from the fund.
Why I don't invest in ETFs?
ETFs are most often linked to a benchmarking index, meaning that they are often not designed to outperform that index. Investors looking for this type of outperformance (which also, of course, carries added risks) should perhaps look to other opportunities.
The one time it's okay to choose a single investment
That's because your investment gives you access to the broad stock market. Meanwhile, if you only invest in S&P 500 ETFs, you won't beat the broad market. Rather, you can expect your portfolio's performance to be in line with that of the broad market.
Experts agree that for most personal investors, a portfolio comprising 5 to 10 ETFs is perfect in terms of diversification. But the number of ETFs is not what you should be looking at.
| Dividend ETF | Assets under management | Dividend yield |
|---|---|---|
| iShares International Select Dividend ETF (IDV) | $4.2 billion | 6.6% |
| Global X SuperDividend ETF (SDIV) | $760 million | 11.8% |
| JPMorgan Equity Premium Income ETF (JEPI) | $33.8 billion | 7.6% |
| iShares Preferred & Income Securities ETF (PFF) | $14.8 billion | 6.3% |
Generally speaking, fewer than 10 ETFs are likely enough to diversify your portfolio, but this will vary depending on your financial goals, ranging from retirement savings to income generation.
