ETFs
Do you have unused money lying around? These passive ETFs could be the place to park it
Do you have unused money lying around? These passive ETFs could be the place to park it
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Finding a safe but profitable place for your idle money can be a challenge. “The market is going to remain volatile,” said Quincy Krosby, chief global strategist at LPL Financial. “Questions arise: where are we going? Where is the economy going?”
Amid growing economic difficulties and growing international tensions, investing in passive ETFs that track the performance of indices may be as safe an investment as there is. In an age where market unpredictability is the norm, passive ETFs offer a stable and inexpensive way to grow your wealth.
Unlike actively managed funds, which rely on a fund manager’s expertise to select stocks, passive ETFs simply aim to replicate the holdings of their benchmark index. This results in relatively lower fees as well as considerable diversification benefits.
SPDR S&P 500 ETF Trust
THE SPDR S&P 500 ETF Trust (NYSE:TO SPY) is one of the most well-known and widely held ETFs on the market. The ETF tracks the performance of the benchmark S&P 500, which tracks the performance of the 500 largest companies in the United States.
Interestingly, SPY was the first exchange-traded fund (ETF) listed in the United States in 1993, revolutionizing the investment landscape. As of May 30, 2024, the fund’s top holdings included some of the most influential and strongest companies in the market. Microsoft Corporation (NASDAQ:MSFT) is its largest holding, representing 7% of the ETF’s portfolio. Other major holdings include Apple Inc (NASDAQ: AAPL, representing 6.31% of the fund’s total portfolio, and NVIDIA Company (NASDAQ: NVDA), with a weight of 6.20%.
The SPDR S&P 500 ETF Trust also offers impressive returns. The ETF’s cumulative return stands at 10.3%, slightly higher than the benchmark’s return of 9.4%. Over the past year, SPY has returned 24%, outperforming the underlying index’s 21.8% returns.
Shelton NASDAQ-100 Index Investor
THE Shelton NASDAQ-100 Index Investor (NASDAQ:NASDX), named one of the Top 10 Mutual Funds for 2024 by Forbes Advisor, is a promising passive ETF investment option. With $1.66 billion in assets under management, the ETF aims to replicate the performance of the Nasdaq-100 Index, thereby benefiting from the market movements of tech giants and other key players at the forefront of innovation and the American economy.
The fund invests in technology giants and other influential non-financial companies listed on the Nasdaq stock exchange, providing investors with ownership in leading market players. Interestingly, the Shelton NASDAQ-100 Index adheres to a policy of investing at least 80% of its total assets in stocks that are part of the Nasdaq-100 Index.
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The ETF’s cumulative return stands at 10.24%, while its one-year return is over 21%. The technology sector’s strong performance propelled the returns of the Shelton NASDAQ-100 Index during this period, outperforming the overall stock market returns tracked by the S&P 500 Index.
Vanguard Russell 2000 ETF
THE Vanguard Russell 2000 ETF (NASDAQ:VTWO) targets the Russell 2000 index, made up of 2,000 small-cap companies. This ETF is ideal for investors looking to capitalize on the growth potential of smaller, potentially more nimble companies.
The Vanguard Russell 2000 ETF manages approximately $9.35 billion in total assets. The fund’s largest holdings include Super Micro Computer Inc. (NASDAQ:SMCI), MicroStrategy Inc. (NASDAQ:MSTR) and Comfort Systems USA, Inc. (NYSE:FIX).
The Russell 2000 Index is widely considered a barometer for small-cap stocks, known for their high growth potential. Over the past year, the Vanguard Russell 2000 ETF has gained 13.5%, while the benchmark Russell 2000 returns at 13.3%.
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