3 ETFs that Beat the S&P 500 in 2024

iShares S&P 100 ETF

OEF

-1.48%

First up is OEF, which tracks the S&P 100 Index. This benchmark is a bit of a relic from the early 2000s when it was still widely quoted. While it doesn’t make headlines much anymore, it remains relevant, commanding $15 billion in AUM.

The S&P 100 focuses on the top 100 stocks within the S&P 500, meaning you get heavier exposure to mega-cap companies. As expected, the ETF skews heavily toward technology, even more so than the broader S&P 500, with 38.3% sector exposure. OEF’s expense ratio is a modest 0.20%.

Invesco S&P 500 Top 50 ETF

XLG

-1.36%

The natural progression from OEF in terms of concentration is the Invesco S&P 500 Top 50 ETF, or XLG. This ETF tracks the S&P 500 Top 50 Index, which, as the name suggests, holds only the largest 50 stocks in the S&P 500.

With XLG, you’ll see even more exposure to mega-cap stocks, particularly in the technology sector, which currently makes up 43.57% of the portfolio. That said, it’s a solid alternative to Nasdaq-100 ETFs since it doesn’t arbitrarily exclude financials, giving you exposure to companies like JPMorgan Chase, Berkshire Hathaway, Visa, and Mastercard.

XLG charges the same 0.20% expense ratio as OEF and currently holds just over $7.8 billion in assets under management.

Principal U.S. Mega Cap ETF

USMC

-1.37%

USMC also leans heavily toward mega caps, continuing the “bigger is better” theme of 2024. However, unlike OEF and XLG, this ETF is actively managed rather than tracking a traditional index.

Here’s how it works: USMC starts by screening the top 50% of the S&P 500 by market capitalization. From there, the largest 10% of that group are weighted by market cap, while the remaining 40% are weighted based on Principal’s proprietary financial strength score.

The result is a portfolio with a relatively high 55.88% active share, meaning it deviates significantly from its benchmark — a good sign for those seeking true active management.

Despite being actively managed, USMC bucks the trend of high fees, charging just 0.12% — lower than both OEF and XLG. It also boasts an impressively low turnover rate of 0.5%, making it a rarity in the active ETF space.

Please note this article is for information purposes only and does not in any way constitute investment advice. It is essential that you seek advice from a registered financial professional prior to making any investment decision.