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Why to Tap S&P 500 ETFs Right Now

Published 08/27/2021, 02:30 AM
Updated 07/09/2023, 06:31 AM

The S&P 500 has been hovering around the all-time high currently. Solid U.S. economic data points, easy monetary and fiscal policies and vaccine distribution led to this upsurge. The index is up 19.7% this year and 30.6% past year.

In the last 10 years, the SPDR S&P 500 (SPY) ETF gained a 15.23% compound annual return, with a 13.45% standard deviation. Tech stocks were mainly responsible for the S&P 500’s monumental achievement.

The S&P 500 currently puts 27.80% of the fund in Information Technology. Apple (NASDAQ:AAPL) (6.17%), Microsoft (NASDAQ:MSFT) (5.99%) and Amazon (NASDAQ:AMZN) (3.66%) are its top three holdings. About 26.54% of the fund is held in the top-10 section, out of which more than 20% goes to Information Technology.

For the 466 S&P 500 members that have reported Q2 results already this reporting season, total earnings are up 97.8% on 25.8% higher revenues, with 86.9% beating EPS estimates and 86.9% topping revenue estimates, per Zacks Earnings Trends issued on Aug 18, 2021.

The healthcare sector holds 13.73% of the fund. The sector is defensive in nature. Amid the ongoing health emergency, no one can ignore the necessity of this sector, let alone the sector’s durability amid the growing need for medication and treatments for other critical diseases.

In particular, renewed optimism over the global economic recovery after the first full U.S. approval of a COVID-19 vaccine made by Pfizer (NYSE:PFE) and BioNTech bolstered risk-on trade. This is because the full approval will help mitigate the ongoing surge in the COVID-19 Delta variant and lead to a continued reopening of the economy.

Hence, investors can play S&P 500 ETFs like SPY, Vanguard S&P 500 ETF VOO, iShares Core S&P 500 ETF IVV, S&P 500 growth ETF SPYG, S&P 500 value ETF SPYV, SPDR Portfolio S&P 500 High Dividend ETF Fund (SPYD) and leveraged S&P 500 ETFs like Direxion Daily S&P 500 Bull 3X Shares (SPXL), ProShares Ultra S&P500 (SSO) and ProShares UltraPro S&P500 UPRO.


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ProShares UltraPro S&P500 (UPRO): ETF Research Reports

Vanguard S&P 500 ETF (VOO): ETF Research Reports

iShares Core S&P 500 ETF (IVV): ETF Research Reports

SPDR Portfolio S&P 500 Growth ETF (SPYG): ETF Research Reports

SPDR Portfolio S&P 500 Value ETF (SPYV): ETF Research Reports

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Zacks Investment Research

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