The ETFs Running Way Past The S&P 500 Right Now

The S&P 500 has served as an excellent benchmark for the state of U.S. economy for decades. Its reliability, touted by icons like Warren Buffett, has become such that S&P 500 exchange-traded funds (ETFs) from Vanguard, State Street and BlackRock — among others — are among the largest in the industry. However, the “buy it and forget it” approach of investing solely in the S&P 500’s appreciation may often leave potentially larger gains on the table.  

The S&P 500’s year-to-date return is impressive at 14.44%. However, there are ETFs on the market that are registering exponentially larger year-to-date returns of over 9x, 6x and 4x. They are available now, and they aren’t from obscure issuers with low trading volume. Here are three examples worth investors’ consideration:

iShares MSCI Global Gold Miners ETF

For centuries, gold has been the default repository to store wealth. The tale of how Archimedes discovered gold fraud being perpetuated on King Hiero II of Syracuse is still told today. Although the present day context is more in terms of physics and water displacement, the notion that gold was valuable and someone tried to steal it in ancient times remains unchanged today.

Gold has long been coveted as a hedge against inflation and currency debasement. Fiat currency, profligate spending by Congress, and 9.1% Bidenomics-fueled inflation has spurred a bull run on gold prices that began in 2022 and continues to the present, with prices at all time highs and closing in on a historic $4,000 per ounce. BlackRock, the largest asset manager on the planet with over $12 trillion in its coffers, naturally has an ETF for gold, and more specifically, gold mining. 

The iShares MSCI Global Gold Miners ETF (NASDAQ: RING) invests in a portfolio of global gold mining stocks. Its year-to-date return is an eye-popping +134.80%.  This equates to 9.4x the S&P 500 Index returns. RING uses the MSCI ACWI Select Gold Miners Investable Market Index as its benchmark. As a BlackRock ETF, RING has the automatic imprimatur of safety due its issuer pedigree, and its preeminence in the gold and gold mining ETF arena demonstrates this. 

Top 10 Holdings:

Steve Forbes recently published an article in Forbes that gave a hint as to why gold may not only continue its bull run, but steepen its appreciation curve in the future. President Trump has made no secret of his desire to cancel federal income tax and return to the gold standard, as it was featured in numerous campaign speeches back in 2016. The architect of his gold policy was Judy Shelton, a Stanford scholar, and one of his past Federal Reserve governors’ board nominees. Forbes cited her book’s hypothetical issuance of US Treasury gold bonds that could be redeemed in physical gold as a way to finally end the Federal Reserve’s runaway printing presses of dollars and continual currency debasement. Given that Treasury Secretary Scott Bessent has also mentioned ending federal income tax in several interviews, a US Treasury gold bond could be the tool to achieve that end, and would also boost gold prices way past the $4,000 near-term target. 

GlobalX Defense Tech ETF

Since President Ronald Reagan effectively ended the Cold War through a policy of “Peace through Strength”, the United States had entered a series of international wars that abruptly came to a halt  with the presidency of Donald Trump during his first term, and has seen the end of half a dozen overseas wars during the first year of his second term — all without sacrificing the life of a single U.S. soldier. Trump’s unparallelled negotiation skills certainly deserve the lion’s share of the credit. However, the supremacy of US military technology also plays a major part of the intimidation factor that has allowed him to successfully get long-standing enemies to agree to peace terms. 

The Global X Defense Tech ETF  (NYSEARCA: SHLD) tracks the Global X Defense Tech Index, which includes companies from around the globe involved with designing, developing, and producing all types of military defense and weaponry products. The range includes the entire gamut: logistics, IT, communications, detection, munitions, et al. SHLD’s year-to-date return at the time of this writing is +89.66.  This is 6.2x the returns of the S&P 500. SHLD is relatively new; its inception date was (ironically) 9-11-2023. 

Top 10 Holdings:

The AI component to modern warfare cannot be overemphasized in the current era. A recent Zacks article analyzed that “ AI provides a critical edge by enabling militaries to process vast amounts of data from sensors, drones and satellites in real-time. This capability has become vital for making rapid, data-informed decisions on the battlefield, optimizing logistics and identifying threats with unprecedented precision.” As a result, companies like Palantir are considered indispensable for many defense systems. General Dynamics’ recent $1.5 billion STRATCOM (Strategic Command) IT contract further exemplifies this urgency. 

In order for President Trump’s peace agreements to be maintained, the deterrent factor of US military lethality is essential – hence the new announced policies from Secretary of War Pete Hegseth, and the rebuilding of naval fleets, transport vehicles, aircraft, and missiles – much needed replacement after the botched Afghanistan withdrawal and the depletion of armaments sent to Ukraine under Joe Biden’s watch. The Pentagon has already started its buying spree, and defense sector companies are on the rise accordingly. 

ARK Next Generation Internet ETF

When it comes to cutting-edge technology funds, Cathie Wood’s ARK Invest family of funds is certainly one of most investors’ top three names that come to mind. The controversial and outspoken Wood has gambled often on risky technology and cryptocurrency plays, and has been on the winning side more often than one of her harshest critics, Mad Money host, James Cramer. As she covers the technology sector exclusively, Wood separates her various ETFs into technology subsectors, such as: biotech, robotics, cutting-edge innovation, etc. 

ARK Next Generation Internet ETF (BATS:ARKW) is ARK Invest’s internet and cloud technology ETF. It includes companies involved with infrastructure, products and services, fintech, big data, Internet of Things, social media, and other internet based functions. ARKW is up +64.54% year-to-date. This is 4.5x the returns of the S&P 500 Index. Its inception date was 9-30-2014. As Wood actively manages ARKW, its holdings are subject to change on an almost daily basis. 

There are seven categories of stocks in ARKW:

• Intelligent devices
• Next generation cloud
• Neuro networks
• Digital wallets
• Autonomous mobility
• Cryptocurrencies
• Smart contracts

Top 10 Holdings:

Cathie Wood truly scours the globe for tech opportunities, and fearlessly will bet big on companies way ahead based on theoretical predictions and sometimes years ahead of their breakthroughs. Her belief in Elon Musk’s Optimus robot project made her a much earlier big Tesla investor ahead of later validation announcements. Her most recent prescient bet on China’s AliBaba only 2 weeks ago when its ADR was at $162, came shortly ahead of its recent AI announcements, sending the ADRs to the $190 vicinity. 

While Cathie Wood has also had to take losses on some of her past investments, leading to Morningstar calling her a “wealth destroyer”, she has made some strong bets in the past that has kept her in the spotlight. ARK does not appear to be going out of business anytime soon, and if ARKW keeps up its trajectory, she will be getting even more incoming investment funds.