ETFs
Investing $1,000 in each of these top ETFs would only incur $12 in annual fees, and they’ve all beaten the S&P 500 and Nasdaq Composite so far in 2024.
Exchange traded funds (ETFs) vary in size and structure. Some are simple and passive, reflecting the performance of a broader index like the S&P 500 Or Nasdaq Composite. Others are complex and active – targeting a specific theme or sector.
Invest $3,000 equally across the Vanguard Russell 1000 Growth Exchange Traded Fund (NASDAQ: VONG), the Roundhill Generative AI and Technology ETF (NYSEMKT: CHAT), and the VanEck Semiconductor Exchange Traded Fund (ETF) (NASDAQ: SMH) would only incur $12 in annual fees. Here’s why all three ETFs have beaten the S&P 500 and Nasdaq Composite so far this year, and why they all could have more room to run.
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A simple and effective way to invest in growth stocks
Daniel Foelber (Avant-garde Russell 1000 Growth ETF: Vanguard owns 86 ETFs, but only five of them have outperformed the S&P 500 and Nasdaq Composite so far in 2024.
There is one thing these ETFs have in common: their three main holdings are all Microsoft, AppleAnd Nvidia. Given Nvidia’s massive rise so far this year, any ETF with significant exposure is probably doing pretty well. Yet what makes these funds so strong as long-term investments is their inexpensive fee structure and diversification.
The Russell 1000 Growth ETF is my favorite of the five, but not by much, given its similarities to the other funds. He chooses most important growth stocks in the world Russell 1000 hintwhile the S&P 500 Growth ETF use it S&P500, and the Vanguard Mega Cap Growth ETF focuses strictly on the biggest names.
THE Vanguard Growth ETF is another valid choice. But there are some subtleties between the stocks Vanguard places in the Growth ETF versus the Growth ETF. Vanguard Value ETF that exclude names like Broadcom And Oracle. THE Vanguard Information Technology ETF reflects the performance of the technology sector. Thanks to strong gains by mega-cap companies, technology has been the best performing sector this year.
The Vanguard Russell 1000 Growth ETF is a good choice for investors looking for a simple, easy-to-understand ETF. With 440 stocks, it has small weightings in companies that are large but not part of the S&P 500. However, the allocation is still dominated by mega-cap growth stocks.
The fund could be a good choice for investors who want exposure to the broader market but with a view to growth and who don’t want to limit themselves to the biggest names. The ETF has an expense ratio of 0.08%, or just $0.80 in annual fees for a $1,000 investment.
An ETF for the booming generative AI market
Scott Levine (Roundhill Generative AI & Technology ETF): The craze for artificial intelligence (AI)-related stocks shows no signs of slowing down. This also seems justified, since AI is increasingly present in our lives – especially generative AI.
The story continues
Unlike a few years ago, nowadays people routinely interact online with chatbots to accomplish various tasks. For investors, this represents a tremendous growth opportunity, which they can access through the Roundhill Generative AI & Technology ETF, which Roundhill Investments, the ETF manager, calls “the world’s first generative AI ETF.” .
If anecdotal experiences haven’t compelled you to consider a generative investment in AI, consider market research. Bloomberg Intelligence predicts that the generative AI market will reach $1.3 trillion in 2032, up from just $40 billion in 2022.
This makes the Roundhill Generative AI & Technology ETF so attractive, and it’s not like the market hasn’t noticed. The ETF has climbed about 22% year to date, outperforming the S&P 500 and the Nasdaq Composite.
Among the ETF’s 54 stocks, Nvidia, a powerhouse in the generative AI space, is the largest holding with an 8.6% weighting. Microsoft and Alphabet represent the second and third positions with weightings of 6.4% and 5.7%, respectively. The Roundhill Generative AI & Technology ETF has an expense ratio of 0.75%.
A diversified ETF for the semiconductor sector
Lee Samaha (VanEck Semiconductor ETF): It’s not easy to pick winners in the semiconductor industry. For each Semiconductor Manufacturing in Taiwan (up 68% from last year), there is a Intel (down 17% over the same period). While some people love and excel at picking winners in an industry, others are looking for a cost-effective way to gain broad exposure to the industry.
This is where the VanEck ETF comes in. With an expense ratio of 0.35% (which implies expenses of just $3.50 if you invest $1,000), this ETF provides broad exposure to the sector. It aims to monitor the performance of companies listed in the United States. Semiconductor index 25. As such, it is not actively managed and includes chip producers like Taiwan Semiconductor and companies that provide semiconductor production equipment like ASML And Applied materials.
The semiconductor industry is generally considered highly cyclical. When growth begins to accelerate, customers begin ordering chips before production ramps up to meet the increase in orders. Likewise, they quickly cancel orders in the event of a slowdown.
In addition to traditional sources of demand, such as consumer electronics, the increasing use of advanced technologies in most sectors of the economy supports the long-term growth of semiconductors. Demand for high-performance computer chips powered by AI is a boon for an industry in the recovery phase. That’s why this ETF is up 53% so far in 2024 alone, and its bull run may not be over yet.
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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Daniel Foelber has the following options: Long December 2026 $30 calls on Intel. Lee Samaha has no position in any of the stocks mentioned. Scott Levine has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends ASML, Alphabet, Apple, Applied Materials, Microsoft, Nvidia, Oracle, Taiwan Semiconductor Manufacturing, Vanguard Index Funds-Vanguard Growth ETF, and Vanguard Index Funds-Vanguard Value ETF. The Motley Fool recommends Broadcom and Intel and recommends the following options: long January 2025 $45 calls on Intel, long January 2026 $395 calls on Microsoft, short August 2024 $35 calls on Intel and short calls of $405 from January 2026 on Microsoft. The Motley Fool has a position in the stocks mentioned above and recommends the following options: long January 2025 $45 calls on Intel, long January 2026 $395 calls on Microsoft, short August 2024 $35 calls on Intel and short January 2026 $405 calls on Microsoft. disclosure policy.
Investing $1,000 in each of these top ETFs would only incur $12 in annual fees, and they’ve all beaten the S&P 500 and Nasdaq Composite so far in 2024. was originally published by The Motley Fool