The S&P 500 closed a winning year and has continued climbing in 2026. The broad market index saw turbulence in the first half of 2025, yet still managed to deliver double-digit gains for a third consecutive year. Wall Street forecasters have since revised their year-end targets sharply higher: Citigroup raised its 2026 target from 7,700 to 8,100, Goldman Sachs and Deutsche Bank each sit at 8,000, and Ed Yardeni of Yardeni Research now sees 8,250, making him the most bullish of the major forecasters. Earnings growth, not multiple expansion, is the common thread behind the upgrades.
The index offers exposure to the top U.S. stocks and reflects the health of the broader economy. While the S&P 500 has a strong track record, several exchange-traded funds have historically outperformed it. Here are three that stand out as candidates to beat the index again in 2026.
VanEck Semiconductor ETF
The VanEck Semiconductor ETF (NASDAQ:SMH) has been one of the strongest-performing ETFs of the past several years, and 2026 has added fresh momentum. The fund tracks the MVIS US Listed Semiconductor 25 Index, concentrating its holdings in the 25 largest U.S.-listed semiconductor companies. Its assets under management have grown to roughly $73 billion, a dramatic expansion from the $3.8 billion the fund held at the start of 2026, reflecting surging investor demand for chip-sector exposure.
Since it holds only 25 stocks, the top 10 positions dominate the portfolio. As of early June 2026, NVIDIA leads at about 16% of assets, followed by Taiwan Semiconductor Manufacturing at around 10%, Micron Technology, Advanced Micro Devices, and Broadcom. Together, NVIDIA and Taiwan Semiconductor account for roughly one-quarter of the fund. The portfolio is weighted by size, so the largest companies carry the heaviest allocations. The expense ratio is 0.35%.
The fund’s performance has been striking. SMH surged more than 50% from its late-March 2026 lows as the AI infrastructure buildout accelerated demand for chips across data centers, edge computing, and consumer devices. Its 52-week range runs from roughly $255 to $643, and the fund was trading near $585 in early June 2026. As long as AI-driven capital expenditure keeps expanding, SMH has a structural tailwind that a diversified index like the S&P 500 cannot fully capture.
Vanguard Growth Index Fund ETF
Vanguard’s Growth Index Fund ETF (NYSEARCA:VUG) tracks the CRSP U.S. Large Cap Growth Index and has maintained a long record of outperforming the S&P 500. The fund launched in January 2004, and its average annual return since inception stands at approximately 12.2%. A 6:1 forward share split took effect on April 21, 2026, reducing the per-share price to reflect the higher share count while leaving returns untouched.
VUG currently holds around 158 stocks, and the index rebalances quarterly, replacing any names that no longer qualify on growth criteria. The top 10 holdings account for roughly 65% of total net assets. As of the most recent data, NVIDIA leads the fund at about 13%, followed by Apple at around 12%, Alphabet at nearly 10%, and Microsoft at roughly 9%. Other notable names in the top 10 include Amazon, Broadcom, Meta Platforms, Tesla, Eli Lilly, and Visa. The technology sector makes up about 53% of the portfolio, with meaningful secondary weights in communication services, consumer discretionary, and healthcare, giving the fund broader diversification than a pure-tech product. The expense ratio is just 0.03%, one of the lowest in the large-cap growth category, and the fund’s yield is approximately 0.33%.
The combination of a concentrated growth tilt, an ultralow cost structure, and deep liquidity has made VUG a consistent outperformer in periods when mega-cap technology earns well above market-wide averages. If AI-related revenue keeps lifting the top holdings, the fund has the portfolio composition to stay ahead of the broader index in 2026.
Invesco QQQ Trust
The Invesco QQQ Trust (NASDAQ:QQQ) tracks the Nasdaq-100 and is one of the most traded ETFs in the United States by average daily volume. It has a 27-year live track record, having launched in March 1999, and has outperformed the S&P 500 in three of the last four calendar years. Its assets under management have climbed to roughly $495 billion, up from $403 billion at the start of 2026, making it one of the largest ETFs in the world by that measure.
The fund holds the 100 most valuable non-financial companies listed on the Nasdaq, with an expense ratio of 0.18%. It allocates about 64% to technology and offers secondary exposure to consumer discretionary, healthcare, and telecommunications. The top 10 holdings, including NVIDIA, Apple, Microsoft, Amazon, Meta Platforms, Broadcom, Tesla, and Alphabet, account for roughly 48% of the portfolio, with those first three names alone representing about 22%.
QQQ has posted a cumulative 3-year return of 134% and a 5-year return of 101%. The fund was trading near $707 in early June 2026, up sharply from $620 at the start of the year. April 2026 saw tech stocks close out their best month since the early days of the Covid pandemic, with the Nasdaq-100 reaching a new all-time high. That kind of sector leadership, grounded in AI infrastructure spending that JPMorgan analysts forecast will reach $775 billion by year-end 2026, is the core reason QQQ has stayed ahead of the broader market.
Editor’s note: This update refreshed price, AUM, and holdings data for SMH, VUG, and QQQ to reflect June 2026 figures; corrected SMH’s index name to MVIS US Listed Semiconductor 25 Index and its AUM to approximately $73 billion; updated VUG’s expense ratio to 0.03%, its stock count to approximately 158, and noted its April 2026 6:1 share split; raised QQQ’s AUM to approximately $495 billion and current share price to approximately $707; and replaced the article’s original S&P 500 target of 7,700 with current Wall Street forecasts, which now range from 7,600 to 8,250 across major banks.
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