The Top 5 ETFs According to Financial Pros

Our proprietary TrackStar data sees what others don’t.

We know which stocks big money managers look at.

And today, we’re looking at the top five ETF searches by financial pros in the past month…

…Chief among them – SPDR S&P 500 ETF SPY.

This ETF sees more search volume than any other month after month.

We’re going to dig into the details behind this popular ticker before we compare it to the other four on our list.

Key Facts About SPY

• Net assets: $496.59 billion
• 12-month trailing yield: 1.34%
• Inception: January 22, 1993
• Expense ratio: 0.09%
• Number of holdings: 504

When most people talk about the ‘stock market,’ they’re referring to the S&P 500 index.

Comprised of and weighed by the top 500 companies by market capitalization, this index is the gold standard for investors.

Everyone from hedge funds to the average Joe tries to beat this index year in and year out.

However, a lot of folks prefer the passive investment style offered by the SPY ETF, which tracks the S&P 500 index.

With an expense ratio of just 0.09%, investors can own the entire S&P 500 index for negligible management costs using the SPY.

The SPY ETF is particularly attractive because of its high liquidity on both the stock and its options.

Its holdings include familiar favorites from Apple to Amazon, Tesla to JP Morgan.

Source: State Street Global Advisors

Because the ETF and index are market capitalization weighted, the index skews towards technology stocks, which dominate the equity landscape.

Source: State Street Global Advisors

Performance

Because of its market capitalization-weighted feature, the S&P 500 always owns the most prominent companies. And since those are the ones that have outperformed the market over the last decade, the SPY ETF has a phenomenal return whether you look back one year, three years, or even three decades.

Source: State Street Global Advisors

Competition

Financial pros are big on index-related ETFs, especially those tied to the S&P 500, Nasdaq 100, and Russell 2000.

However, we can often learn where their heads are at by seeing whether there are more searches for the leveraged and inverse products.

• ProShares UltraPro QQQ (TQQQ): This ETF tracks 3x the daily movement of the Nasdaq 100, resetting every day.
• ProShares UltraPro Short QQQ (SQQQ): The SQQQ is the opposite of the TQQQ, tracking the inverse of 3x the daily movement of the Nasaq 100 ETF.
• Invesco QQQ (QQQ): The QQQ is the straightforward Nasdaq 100 ETF that, like the SPY, holds the 100 market-weighted stocks that make up the Nasdaq 100.
• iShares Russell 2000 ETF (IWM): Last up is the IWM, the same as the QQQ and SPY, except that it tracks the Russell 2000 Small Cap Index, holding all 2000 stocks.

What’s interesting is that despite the poor long-term performance, financial experts look at the SQQQ more than the QQQ, though not as much as the TQQQ.

This might imply they’re looking at gaining short-term leverage rather than planning for the long-term.

However, it should be noted that the long-term effects of holding leveraged ETFs can be devastating unless the underlying index goes up consistently. Otherwise, the cost of that leverage will erode the value of the ETF over time.

Our Opinion 10/10 

You can’t go wrong using the SPY ETF. 

It’s a core holding of most investors’ portfolios for a reason.

Investors will park money in the ETF while looking for their next big idea.

Large funds will use it because it’s so liquid it can absorb their large positions.

Plus, you can hold the ETF and trade options against your position using strategies like covered calls, to boost your overall performance.

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