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Finding a safe but profitable place for your idle cash can be a challenge. “The market will continue to be choppy,” said Quincy Krosby, chief global strategist at LPL Financial. “There are questions about: Where are we going? Where is the economy going?”
Amid growing economic headwinds and rising international tensions, investing in passive ETFs that replicate index performance may be as safe an investment as there is. In an era where market unpredictability is the norm, passive ETFs offer a stable, low-cost way to grow wealth.
Unlike actively managed funds, which rely on a fund manager’s expertise to select stocks, passive ETFs aim to simply replicate the holdings of their benchmark index. This results in relatively lower fees as well as superior diversification benefits.
SPDR S&P 500 ETF Fund
O SPDR S&P 500 ETF Fund (NYSE:SPY) is one of the most well-known and widely held ETFs on the market. The ETF replicates the performance of the benchmark S&P 500 index, which tracks the performance of the 500 largest U.S. companies
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 robust 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 Corporation (NASDAQ: NVDA), with a weight of 6.20%.
The SPDR S&P 500 ETF Trust also has impressive returns. The ETF’s year-to-date return is 10.3%, slightly higher than the benchmark index’s 9.4% returns. Last year, SPY returned 24%, outperforming the 21.8% returns of the underlying index.
Shelton NASDAQ-100 Index Investor
O Shelton NASDAQ-100 Index Investor (NASDAQ:NASDX), named among Forbes Advisor’s Top 10 Mutual Funds for 2024, is a promising passive ETF investing option. With $1.66 billion in total assets under management, the ETF aims to replicate the performance of the Nasdaq-100 index, thus benefiting from the market movements of technology giants and other key players who are at the forefront of innovation and the global economy. USA.
The fund invests in technology giants and other influential non-financial companies on the Nasdaq exchange, giving investors a stake in key 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 constituents of the Nasdaq-100 Index.
The ETF’s year-to-date return is 10.24%, while the one-year return is over 21%. The strong performance of the technology sector boosted 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
O Vanguard Russell 2000 ETF (NASDAQ:VTWO) targets the Russell 2000 Index, which consists of 2,000 small-cap companies. This ETF is ideal for investors looking to capitalize on the growth potential of smaller, potentially more agile companies.
The Vanguard Russell 2000 ETF has approximately $9.35 billion in total assets under management. The fund’s largest holdings include Super Micro Computer Inc.SMCI), MicroStrategy Inc.MSTR) and Comfort Systems USA, Inc.TO REPAIR).
The Russell 2000 Index is widely considered a barometer for small-cap stocks known for their high growth potential. Last year, the Vanguard Russell 2000 ETF gained 13.5%, while the benchmark Russell 2000 returns were 13.3%.
Eager for higher returns? Look this
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For example, Basecamp Alpine Notes offers a target APY of 9% with a tenor of just three months, making it a powerful short-term cash management tool with incredible flexibility. EquityMultiple issued 61 series of Alpine notes and met all payment and financing obligations with no missed or late interest payments. With a low minimum investment of just $1,000, Basecamp Alpine Notes makes it easier than ever to start building a high-yield portfolio.
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This article Do you have idle money lying around? These passive ETFs could be the place to park them originally appeared in Benzinga.com
