Proprietary Data Insights Financial Pros’ Top S&P 500 Strategy ETF Searches in the Last Month
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The Maverick ETF Rewriting the Rules of Market Success |
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The S&P 500 ETF (SPY) is far and away the most popular ETF amongst financial pros. But buying an ETF that mirrors the index isn’t the only, nor the most profitable, way to invest. Today, we want to explore an ETF that takes a unique approach and offers some key insights about investing as a whole. Key Facts About XLG
Is bigger always better? According to Invesco’s S&P 500 Top 50 ETF (XLG), yes it is. Comprised of the top 50 companies in the S&P 500 weighted by market cap, the XLG outperformed all other S&P 500-style ETFs on our list. Unsurprisingly, the ETF is heavily weighted towards technology stocks. By investing in the largest stocks in the S&P 500, the XLG naturally buys companies performing better than others. That’s why the top holdings include Apple, Microsoft, Amazon, and now NVIDIA. Performance What’s interesting is the top 50 stocks consistently outperform the S&P 100 largest companies, meaning that going with bigger companies tends to yield higher returns.
That flies in the face of many discount and value investors and instead favors momentum traders. Competition To make the lofty claim the XLG outperforms other S&P 500 strategies, we compared it to the other top searches by financial pros.
As you can see from the chart below, a focus on higher growth yields better returns. However, it’s also more volatile and exposed to larger drawdowns during market routes.
Our Opinion 10/10 The XLG isn’t as well known as its peers. However, it’s unique niche tends to outperform in the long-run. A balanced strategy to consider: invest in SPY, RSP, and XLG, shifting towards growth when markets are depressed and balance when they’re overextended. |
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