Leading To identify the top-performing ETFs in this category, our screening process focused on those exhibiting superior returns across various time frames.
Large-blend stock funds play a crucial role as foundational elements in constructing a diversified investment portfolio. In recent times, investors have gravitated towards passively managed S&P 500 funds for large-blend investments, a strategy that has proven lucrative. The allure of S&P 500 Exchange-Traded Funds (ETFs) has been particularly evident in their stellar performance over one, three, and five-year periods.
Over the last 12 months, large-blend funds have seen an average increase of 17.4%, slightly trailing the 20.5% gain in the U.S. stock market measured by the Morningstar US Market Index. Noteworthy, however, is the consistent outperformance of S&P 500 ETFs within the large-blend category. This trend has been observed over varying time frames, with the S&P 500 ETFs proving to be robust contenders.
Among the standout performers in the large-blend category, ETF offerings from iShares and Vanguard have captured attention. These funds have distinguished themselves through their substantial exposure to mega-cap stocks and their attractive cost structures.
Here’s a closer look at the top-performing large-blend ETFs that have been making waves in the investment landscape:
Invesco S&P 500 Quality ETF (SPHQ)
- Morningstar Medalist Rating: Silver
- Morningstar Rating: 5 stars
- Investment Strategy: SPHQ builds a portfolio focusing on profitable industry leaders with robust balance sheets. Targeting high-quality companies while maintaining a low fee positions it for potential long-term outperformance. The fund tracks the S&P 500 Quality Index, emphasizing stable and profitable companies over those reliant on debt financing.
SPDR Portfolio S&P 500 ETF (SPLG)
- Morningstar Medalist Rating: Gold
- Morningstar Rating: 4 stars
- Investment Strategy: SPLG seeks to match the total return performance of the S&P 500 Index. With a lower fee compared to peers, SPLG has demonstrated strong performance over a 10-year period, outperforming the category’s average return.
SPDR S&P 500 ETF Trust (SPY)
- Morningstar Medalist Rating: Silver
- Morningstar Rating: 4 stars
- Investment Strategy: As the first-ever exchange-traded fund listed in the United States, SPY combines a diversified portfolio of U.S. large-cap stocks with low turnover and a competitive fee. Replicating the flagship S&P 500, SPY remains a cornerstone in the large-blend category.
Vanguard Mega Cap ETF (MGC)
- Morningstar Medalist Rating: Gold
- Morningstar Rating: 5 stars
- Investment Strategy: Vanguard S&P 500 Index offers a broadly diversified, low-turnover portfolio of U.S. large-cap stocks at an incredibly low cost. Outperforming its average category peer over the trailing 10 years, VOO stands out for its enduring performance potential.
Understanding Large-Blend Funds
Large-blend funds are often considered representative of the broader U.S. stock market. These portfolios neither focus exclusively on growth nor value but instead invest across various U.S. industries. Due to their broad exposure, large-blend funds typically exhibit performance patterns similar to the S&P 500 Index.
Screening for Excellence
To identify the top-performing large-blend ETFs, a thorough screening process was employed. ETFs ranking in the top 33% of the category across one-, three-, and five-year time frames, using their lowest-cost share classes, were considered. Further refinement included Morningstar Medalist Ratings of Gold, Silver, or Bronze and the exclusion of funds with less than $100 million in assets or minimal Morningstar analyst input.
Conclusion
The current investment landscape emphasizes the significance of large-blend stock funds, with S&P 500 ETFs standing out as robust performers. iShares and Vanguard ETFs have particularly shone in this category, offering investors exposure to mega-cap stocks at competitive costs. As the market evolves, these top-performing large-blend ETFs showcase the potential for sustainable, diversified growth within the ever-dynamic world of investments.
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