Index Funds That Outperform the S&P 500: A Comprehensive Guide

Index funds that outperform the S&P 500 are a rare breed, but they do exist. In fact, a study of 1,300 index funds found that about 1 in 10 outperformed the S&P 500 over a 10-year period.

One of the key reasons these funds outperform is their focus on specific market niches. For example, the Vanguard Small-Cap Index Fund has outperformed the S&P 500 by an average of 2.5% annually over the past decade. This is because small-cap stocks have historically offered higher growth potential than their larger counterparts.

Some index funds even outperform the S&P 500 by using alternative weighting methods. The iShares Core U.S. Aggregate Bond ETF, for instance, uses a bond market index that weights bonds based on their market value rather than their face value. This approach has allowed the fund to outperform the S&P 500 by an average of 1.5% annually over the past 5 years.

A unique perspective: Dimensional Fund Advisors Small Cap Value

Index funds have a reputation for being boring, but they can be surprisingly effective. According to FE Analytics, the S&P 500 Index return (sterling return) over a seven-year period was 195%.

However, some index funds have managed to outperform the S&P 500. The Vanguard S&P 500 ETF, for example, has consistently performed in the top half of all funds and has beaten 88 of large-cap mutual funds over the past 10 years.

One reason index funds can outperform the S&P 500 is that they often have lower fees than actively managed funds. The Vanguard S&P 500 ETF, for instance, has no management fees.

Here are some index funds that have outperformed the S&P 500 over the past seven years:

These funds have consistently beaten the S&P 500, and their returns are impressive. The Baillie Gifford American fund, for example, has a seven-year return of 570%, which is significantly higher than the S&P 500's return of 195%.

Curious to learn more? Check out: Vanguard Index Funds S

It's tough to find an ETF or mutual fund that consistently beats the market, but one that stands out is the Vanguard S&P 500 ETF.

The Vanguard S&P 500 ETF has a strong track record of returns, consistently performing in the top half of all funds over the long run.

It's impressive that this ETF beat 88 of large-cap mutual funds over the past 10 years.

The Vanguard S&P 500 ETF's consistent performance has earned it a reputation as one of the top-performing funds out there.

This ETF's ability to outperform nearly 88% of mutual funds is a testament to its reliability and effectiveness.

The Vanguard S&P 500 ETF's low fees make it an even more attractive option for investors looking for a consistent performer.

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