The S&P 500 ETF Nobody Talks About That Could Beat VOO

17 hours ago 3

David Dierking, The Motley Fool

Fri, June 12, 2026 astatine 10:35 AM CDT 4 min read

For astir investors, simply investing successful the S&P 500 has delivered beardown returns implicit the past respective years. Its high-tech attraction has kept investors successful the themes that are starring the marketplace higher.

But with ostentation risks rising, user sentiment low, and GDP maturation slowing, it's clip to measure whether the aboriginal tin look similar the past. Investing successful broad-market ETFs, specified arsenic the Vanguard S&P 500 ETF (NYSEMKT: VOO), has worked for a while.

Will AI make the world's archetypal trillionaire? Our squad conscionable released a study connected the 1 little-known company, called an "Indispensable Monopoly" providing the captious exertion Nvidia and Intel some need. Continue »

But investors mightiness request to beryllium much selective going forward. Here's 1 enactment for investors to consider.

It's clip to absorption connected prime

The 1 happening we're precise apt to support seeing implicit the adjacent 12 to 18 months is an artificial quality (AI)-fueled net and gross boom. In Q1 2026, S&P 500 net grew by much than 28% twelvemonth implicit year, the champion fig since 2021.

The adjacent respective quarters could look likewise strong. Full-year 2026 net maturation is presently forecast astatine astir 22%. 2027 could spot different 15% net maturation connected apical of that. In some years, the tech assemblage is apt to thrust the gains.

Two banal  marketplace  analysts looking astatine  a machine  screen.

Image source: Getty Images.

That means investors should beryllium looking to upgrade their vulnerability to these net occurrence stories. I'm not talking astir adding a axenic tech ETF due to the fact that that's wherever the biggest net maturation is coming from. I'm talking astir focusing much straight connected these high-quality net growers -- the companies with steadfast equilibrium sheets and the quality to turn successful aggregate economical environments.

That's wherefore I'm looking astatine the Invesco S&P 500 Quality ETF (NYSEMKT: SPHQ). It targets 3 cardinal measures successful its enactment process: instrumentality connected equity (ROE), the accruals ratio, and the fiscal leverage ratio. This helps weed retired immoderate of the weaker S&P 500 components and thin heavier into the leaders.

SPHQ: Performance and cardinal metrics

Metric

SPHQ

VOO

Expense ratio

0.15%

0.03%

Assets nether management

$18.9 billion

$991.3 billion

Number of holdings

100

505

Three-year instrumentality (annualized)

22.1%

21.3%

Five-year instrumentality (annualized)

14.3%

13.4%

Top sectors

Tech (34%), industrials (23%), user staples (14%)

Tech (35%), financials (12%), connection services (11%)

Top holdings

LAM Research (4.9%), Apple (4.6%), GE Aerospace (4.5%)

Nvidia (7.9%), Apple (6.5%), Alphabet (6.5%)

Data sources: Invesco, Vanguard.

Read Entire Article