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Finding a safe, but profitable place for your idle cash can be challenging. “The market is going to remain choppy,” said Quincy Krosby, chief global strategist at LPL Financial, “There are questions as to: Where are we headed? Where’s the economy headed?”
Amid surging economic headwinds and mounting international tensions, investing in passive ETFs that replicate the performance of indexes can be as safe of 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 the expertise of a fund manager to select stocks, passive ETFs simply aim to replicate the holdings of their benchmark index. This results in relatively lower fees as well as surmounting diversification benefits.
SPDR S&P 500 ETF Trust
The SPDR S&P 500 ETF Trust (NYSE:SPY) is one of the most well-known and widely held ETFs in the market. The ETF replicates the performance of the benchmark S&P 500 Index, which tracks the performance of the 500 largest companies in the U.S.
Interestingly, SPY was the first exchange-traded fund (ETF) listed in the United States back in 1993, revolutionizing the investment landscape. As of May 30, 2024, the fund’s top holdings include some of the most influential and robust companies in the market. Microsoft Corporation (NASDAQ:MSFT) is its largest holding, accounting for 7% of the ETF’s portfolio. Other large holdings include Apple Inc (NASDAQ: AAPL, accounting for 6.31% of the fund’s total portfolio, and NVIDIA Corporation (NASDAQ: NVDA), with a 6.20% weightage.
The SPDR S&P 500 ETF Trust boasts impressive returns as well. The ETF’s year-to-date return stands at 10.3%, slightly higher than the benchmark index’s 9.4% returns. Over the past year, SPY has returned 24%, beating the underlying index’s 21.8% returns.
Shelton NASDAQ-100 Index Investor
The Shelton NASDAQ-100 Index Investor (NASDAQ:NASDX), named in the Forbes Advisor’s 10 best mutual funds for 2024, is a promising passive ETF investment option. With $1.66 billion in total assets under management, the ETF aims to replicate the performance of the Nasdaq-100 Index, thereby benefiting from the market movements of tech giants and other key players that are at the forefront of innovation and the U.S. economy.
The fund invests in tech giants and other influential non-financial companies on the Nasdaq exchange, providing investors with a stake in major 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 stands at 10.24%, while its one-year return is over 21%. The strong tech sector performance has propelled the Shelton NASDAQ-100 Index’s returns over this period, outperforming the overall stock market returns tracked by the S&P 500 index.
Vanguard Russell 2000 ETF
The 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. (NASDAQ:SMCI), MicroStrategy Inc. (NASDAQ:MSTR), and Comfort Systems USA, Inc. (NYSE:FIX).
The Russell 2000 Index is widely regarded as a barometer for small-cap stocks, known for their potential for high growth. Over the past year, the Vanguard Russell 2000 ETF has gained 13.5%, while the benchmark Russell 2000’s returns stand at 13.3%.
Itching for Higher Returns? Check This out
The current high-interest-rate environment has created an incredible opportunity for income-seeking investors to earn massive yields, but not through dividend stocks or ETFs… Certain private market real estate investments are giving retail investors the opportunity to capitalize on these high-yield opportunities and Benzinga has identified some of the most attractive options for you to consider.
For instance, Basecamp Alpine Notes offers a target APY of 9% with a term of only three months, making it a powerful short-term cash management tool with incredible flexibility. EquityMultiple has issued 61 Alpine Notes Series and has met all payment and funding 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.
Don’t miss out on this opportunity to take advantage of high-yield investments while rates are high. Check out Benzinga’s favorite high-yield offerings.
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This article Got Idle Cash Lying Around? These Passive ETFs Could Be The Place To Park It originally appeared on Benzinga.com
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