Apple, Microsoft, Amazon, Facebook, Netflix, Alphabet, Tesla, Berkshire Hathaway, JP Morgan Chase, and Johnson & Johnson are among the top holdings in the SPDR S&P 500 Trust ETF (SPY).
Is QQQ a better investment than the S&P 500?
Invesco QQQ ETF (QQQ) outpaced the S&P 500 by 0.46 percent in Q3 (on a NAV basis, 6/30/2021 – 9/30/2021) and returned 1.04 percent. Although growth-oriented companies outperformed at the start of the quarter, volatility returned to the market in September, causing these same firms to underperform. The underweight allocation and differentiated holdings in Industrials, as well as the differentiated holdings in Health Care and Consumer Staples, were the major drivers of QQQ’s relative outperformance versus the S&P 500 in Q3. Overall, Health Care (+5.01%) outperformed the Consumer Staples (+1.78%) and Communication Services (+1.56%) sectors in QQQ. Financials, on the other hand, was the best-performing sector in the S&P 500 (+2.74%), followed by Utilities (+1.74%) and Communication Services (+1.63%).
During the quarter, QQQ’s Industrials exposure had an average weight of 2.51% and was down 3.07 percent. It did, however, exceed the S&P 500’s Industrials, which returned -4.28 percent. The sector’s underweight and relative outperformance combined to make it the largest contributor to the fund’s quarterly outperformance vs the S&P 500. Companies like Verisk Analytics, a research and consultancy organization, and Copart Inc., an automotive distributor, had higher exposure to QQQ. Many industrial businesses that provide goods, such as Stanley Black & Decker Inc., a hand and power tool maker, and Boeing, an airplane manufacturer, were also underrepresented in QQQ. The supply chain concerns that have been plaguing both the US and global economies were reflected in this gap within the Industrials sector. Manufacturing slowed as a result of COVID-19, causing supply disruptions in everything from vehicles to semiconductors. Companies have had to reduce their stocks as a result, and many have been unable to satisfy increased customer demand. Service-oriented businesses have succeeded better since they are less reliant on items to generate revenue. However, service-based businesses faced their own issues, such as labor shortages and workers who were sluggish to return to work.
The best-performing sector in QQQ was Health Care, which maintained its good performance from Q2. With a total return of 63.78 percent and an average weight of 1.02 percent, Moderna was once again the greatest performer in the Health Care sector. Moderna has returned 268.39% year to date, making the COVID-19 vaccine producer QQQ’s best performance. Moderna has outperformed the next two best performers, Devon Energy Corp (+124.60%) and Bath & Body Works Inc. (+109.71%), in 2021. In the fight against COVID, Moderna has been at the forefront. According to the CDC, the business has administered over 153 million vaccine doses in the United States, accounting for over 38% of all vaccines given in the country. Inclusion in the S&P 500 Index aided the company’s stock performance as well. On July 21st, Moderna was added to the index, and it was promptly added to numerous funds that track the S&P 500, providing performance a boost. Moderna was introduced to the NASDAQ 100, the index that QQQ is based on, in July of 2020, and has returned 365.48 percent since then.
Consumer Staples, led by Costco Wholesale Corp, performed well in QQQ for the month of September. Costco, a well-known membership warehouse store, returned 13.78 percent with an average weight of 1.36 percent for the quarter. In June and July, the company posted strong monthly sales of 16.9% and 13.8 percent, respectively, above the previous year. In September, Costco reported solid quarterly earnings of $3.90 per share, exceeding projections by 5.80 percent.
The Information Technology exposure of QQQ weighed on its performance in comparison to the S&P 500. Concerns about valuation and increasing interest rates prompted investors to pull money out of stocks that had fared well since the Pandemic began. Despite good earnings announcements and exceeding analysts’ forecasts throughout the quarter, companies like Zoom Video Communications and DocuSign Inc. were focusing on future growth as more individuals are likely to return to work. Micron Technology, the largest US memory chip maker, also hurt the sector’s performance by forecasting lower revenue than expected at the end of September. Micron’s CEO, Sanjay Mehrotra, stated that the company’s rising costs are unlikely to subside in the near future. Furthermore, these price hikes “will be reflected in our pricing, even as we remain dedicated to a competitive, value-based pricing approach with all of our clients,” according to the company.
Is QQQ superior to VTI?
The investments VTI and QQQ are not the same. VTI provides greater diversity due to its 35-fold increase in stock holdings. However, over the last ten years, this has resulted in a worse performance. Nonetheless, I believe both are excellent long-term investments.
What is the difference between an exchange-traded fund (ETF) and a structured product (SPDR)?
- State Street Global Advisors provides SPDR exchange traded funds, which are designed to track indexes or benchmarks.
- The SPDR 500 Trust, sometimes known as spiders, invests in the same companies as the S&P 500 Index.
- ETFs vary from mutual funds in that their shares are exchanged on stock markets.
- There are SPDR ETFs that monitor specific market sectors such as technology, utilities, and financials, and some have been established to target specific market capitalizations such as small, mid, and big.
- Hedging can be added to a portfolio by shorting SPDRs or buying put options.
What is the DIA ETF, exactly?
The Dow Jones Industrial Average (DJIA) is an exchange-traded fund (ETF) that monitors the equities of some of the top firms in the United States. Because it only includes 30 securities, the fund isn’t as diversified as most ETFs, but these stocks come from companies with good fundamentals and finances. These factors offer them a leg up on the competition when it comes to weathering extreme economic and market events.
Is VOO or spy the better option?
When we extend the investment horizon to five years, we can observe that VOO outperforms SPY practically every time. Only a few 5-year periods in the historical data show SPY beating VOO, and even then, the difference was hardly more than 1%. When compared to VOO, the average relative percent change continues to move in the negative direction, implying that SPY is continually “underperforming” (growing less). VOO appears to improve gradually with time.
When we compare the figures for 1-day, 1-year, and 5-year periods, we can see that the average percent shift between SPY and VOO grows by an order of magnitude as the investment term lengthens. The median 1-day percent change differences are 0.0003%, whereas the 1-year and 5-year intervals are 0.0871 and 0.7158 percent, respectively. As time goes on, the range and standard deviation rise as well.
Finally, from 9/9/2010 to the current date, I extended the length to the utmost allowed by the dataset and discovered that SPY rose 234.1 percent while VOO increased 236.5 percent, resulting in a 2.4 percent difference over 10 years.
Is Vanguard VOO a decent stock to buy?
The S&P 500 index includes 500 of the largest firms in the United States. The Vanguard S&P 500 ETF (VOO) seeks to replicate the performance of the S&P 500 index.
VOO appeals to many investors since it is well-diversified and consists of large-cap stocks (equities of large corporations). In comparison to smaller enterprises, large-cap stocks are more reliable and have a proven track record of success.
The fund’s broad-based, diversified stock portfolio can help mitigate, but not eliminate, the risk of loss in the event of a market downturn. The Vanguard S&P 500 (as of Jan. 5, 2022) has the following major characteristics:
VOO or Fxaix: which is better?
Costs are one of the biggest killers of portfolio development if you’re just starting to invest and learning how fees effect your portfolio. Over the course of 30 years, the difference between a 2% cost and a 0.04 percent fee might cause your portfolio to lose half of its value.
The expense ratio for FXAIX is 0.015 percent, while the expense ratio for VOO is 0.03 percent.
In this instance, both of these funds have a similar fee.
The Vanguard S&P 500 ETF (VOO) is less expensive than 96% of its competitors.