Beyond SPY: Five Outperforming Large Cap ETFs
Thursday, December 10th, 2009Michael Johnston submits:
At the core of many investor portfolios is an allocation to large cap, U.S.-listed equities. With market capitalizations usually exceeding $10 billion, large cap stocks generally have long operating histories, stable operations, and large amounts of cash on hand, making them less risky investments than small and mid cap firms. Moreover, although domestic large caps are headquartered in the U.S., they are often multinational companies that generate significant portions of revenue and earnings from overseas, providing some degree of geographic diversification with the efficiency and liquidity that comes with U.S. exchanges.
One of the most widely-followed benchmarks in the world is the S&P 500, a collection of the 500 largest publicly-traded U.S. companies (with a few exceptions). And one of the most popular ways to gain exposure to the companies included in this index is the SPDR S&P 500 ETF (SPY). SPY is one of the largest and most heavily-traded ETFs in the world, and with good reason. Its diversified holdings (500 individual securities) and low costs to investors (expense ratio of just 0.09%) make it an attractive option for investors looking to build their portfolios around a base of large cap stocks.
