Main financial assets discussed: Invesco S&P 500 Equal Weight ETF (RSP), Vanguard S&P 500 ETF (VOO)
Top 3 key points:
1. The S&P 500 has seen large gains from a few highly weighted stocks, leading to a concentrated market rally.
2. The Invesco S&P 500 Equal Weight ETF (RSP) offers a more diversified approach by equal weighting the stocks in the S&P 500 index.
3. Despite underperformance in the first half of the year, the author recommends buying RSP due to the potential for a rebalancing effect and historical evidence of the long-term success of equal-weight strategies.
Recommended actions: **Buy** RSP
The SPDR Portfolio S&P 500 ETF (SPLG) offers investors a low expense ratio of 0.02% and strong long-term performance, making it an attractive investment option for building a diversified portfolio around the entire S&P 500.
Large-blend stock funds, particularly S&P 500 exchange-traded funds (ETFs), have performed well in the last five years, with gains of 15.1% as of August 30, 2023, and low fees associated with iShares and Vanguard funds have contributed to their success. Among the top-performing large-blend ETFs are the Invesco S&P 500 Quality ETF, iShares Core S&P 500 ETF, SPDR Portfolio S&P 500 ETF, and Vanguard S&P 500 ETF.
Investing in the S&P 500 ETF, such as the Vanguard S&P 500 ETF, can be a low-effort way to build wealth over time, with the potential to turn $100 per week into $790,000 in approximately 30 years.
Shorting the S&P 500 through the ProShares Short S&P500 (SH) ETF is becoming an attractive option for investors due to higher interest rates on cash holdings and the ability to earn a stronger cash yield than owning stocks long through a regular index fund.
The article mentions the Invesco S&P 500 GARP ETF (SPGP). The author's recommendation is to buy the SPGP ETF.
The author's core argument is that the SPGP ETF is an exceptional fund that combines growth and value investing strategies and has delivered exceptional returns in both bull and bear markets. The key information and data provided include the fund's investment strategy, sector allocation, historical returns, distribution and yield, comparison with other funds (OMFL and MOAT), and the author's rating of the SPGP ETF as a buy.
The S&P 500 has gained 17% year to date, signaling the onset of a new bull market, and investors looking to capitalize on this should consider the Vanguard S&P 500 ETF and the Invesco S&P 500 Quality ETF, both of which have produced significant gains over the last decade.
Higher interest rates have historically correlated with lower market returns, but new research from BMO Capital Markets suggests that the impact of higher rates on the S&P 500 is overblown, as returns tend to be slightly below average but with lower volatility; BMO recommends buying 28 stocks with low leverage and high free cash flow to benefit from this strategy.
The technology sector has consistently outperformed the S&P 500 over the last five years, making the Vanguard Information Technology ETF a potential option for investors looking to capitalize on the sector's historical wealth creation, although concentration risk and volatility should be taken into consideration.
