This ETF Has Nearly Doubled the S&P 500 Since 2009. Here's How It Could Turn $200 per Month Into $1.3 Million.
Investing in exchange-traded funds (ETFs) is one of the simplest and most straightforward ways to buy into the stock market. By owning just one share of an ETF, you can gain exposure to dozens or hundreds of stocks at once.
While some ETFs aim to track major indexes, like the S&P 500 (SNPINDEX: ^GSPC), others are more niche. Growth ETFs, for example, are designed to beat the market and earn above-average returns over time.
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These investments can carry more risk than broad-market funds, but they could also help supercharge your savings. This one growth ETF has nearly doubled the S&P 500’s performance over the last 15 years, and it could potentially turn just $200 per month into more than $1 million. Here’s how.
If you’re looking for a growth ETF with a proven track record, the Schwab U.S. Large-Cap Growth ETF (NYSEMKT: SCHG) could be a smart option. This fund includes 231 stocks (nearly half of which come from the tech sector), with a weighted average market capitalization of around $1.4 billion.
The five largest holdings in this ETF are Nvidia, Apple, Microsoft, Amazon, and Meta Platforms, respectively, and those stocks alone make up nearly 40% of the entire fund. The rest of the ETF, then, is made up of dozens of smaller stocks.
While all of the holdings in this fund are large-cap stocks (meaning they have a market cap of at least $10 billion), the inclusion of “mega-cap” stocks (generally defined as having a market cap of at least $200 billion) can help mitigate some risk. These industry titans may not have quite as much room for explosive growth as up-and-coming companies, but they’re also more likely to survive market volatility.
Growth ETFs are designed to outperform the market over time, and this fund is no exception. Since its inception in December 2009, it’s earned total returns of around 755%, as of this writing — almost double the S&P 500’s returns of 435% in that time.
Keep in mind that there are no guarantees this ETF will continue performing at this rate, and growth ETFs, in general, tend to be riskier than many other types of investments. They are also often hit harder during downturns, so be prepared for more severe fluctuations if the market takes a turn for the worse.
Again, there’s no way to know for certain how any investment will fare going forward, as past performance doesn’t predict future returns. But it can still be helpful to look at those past returns to get a rough idea of how much you might be able to earn.
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