The 3 Best ETFs to Beat the Nasdaq Through 2030
Finding the best ETFs to buy to beat the Nasdaq in 2024 can put you on the path to success. Especially with the technology sector’s valuations becoming out of whack.
Over the past 9 months, companies from the Nasdaq have surged to record levels. The long term growth prospects of artificial intelligence and lower interest rates going into 2025 made investors extremely optimistic. However, with the Shiller PE Index currently trading at ~36, valuations look unsustainable at current levels.
As the market anticipates interest rate cuts in the back half of this year, the truth is that they might already be priced in. Additionally, from a technical perspective, Nvidia’s (NASDAQ:NVDA) rise looks extremely reminiscent of the dot com bubble. While it has been largely backed by strong earnings growth, meteoric rises are typically followed by significant drawdowns in stock prices.
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Therefore, diversifying away into ETFs can be a strategic move to protect your portfolio in wake of the coming reckoning.
Now, here are the 3 best ETFs to buy to beat the Nasdaq through 2030!
Vanguard Information Technology Index Fund (VGT)
Vanguard Information Technology Index Fund (NYSEARCA:VGT) is undoubtedly one of the best ETFs to buy to beat the Nasdaq through 2030. This fund includes diversified exposure to the technology sector giving investors a broad range of emerging and established players in the space.
The Vanguard Information Technology Index Fund offers investors a unique way to capitalize on the robust growth of technology led businesses. As generative AI, cloud computing, and other industries continue to reshape the global economy, VGT will benefit from these trends. However, one of the key advantages of VGT is its low expense ratio of .10%. This is much lower than industry averages, with the fund returning 13.62% on average since inception. The fund’s top largest holdings include Microsoft (NASDAQ:MSFT), Apple (NASDAQ:AAPL), Nvidia, Broadcom (NASDAQ:AVGO), and Advanced Micro Devices (NASDAQ:AMD). Additionally, the median market capitalization of the company’s in the fund is $746 billion. Therefore, investors will gain exposure to largest cap technology companies all of which have significant earnings growth potential that can multiply their wealth.
iShares Semiconductor ETF (SOXX)
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iShares Semiconductor ETF (NASDAQ:SOXX) is another stellar choice that has tremendous potential to beat the Nasdaq. SOXX tracks the ICE Semiconductor Index, providing exposure to leading semiconductor giants.
The iShares Semiconductor ETF is more suited for risk-tolerant investors. SOXX allows investors to benefit from the increased demand for semiconductor chips driven by trends like AI, 5G and the IoT. As the world becomes more interconnected, the semiconductor industry’s growth is poised to continue. It currently boasts a net expense ratio of 0.35%, making it relatively cost effective to own. Moreover, with focus on a high-growth sector like the semiconductor industry, the potential for higher returns is substantial. The fund’s top five largest holdings include Broadcom, Nvidia, Advanced Micro Devices, Applied Materials (NASDAQ:AMAT) and Qualcomm (NASDAQ:QCOM). Although the sector’s growth may appear to be at a roadblock, it holds potential to outperform the Nasdaq through 2030.
Invesco S&P MidCap Momentum ETF (XMMO)
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Invesco S&P MidCap Momentum ETF (NYSEARCA:XMMO) is the final ETF choice for those looking to beat the Nasdaq. With a distinct focus on mid-cap stocks, XMMO is more risky but holds potential for much higher returns.
The Invesco S&P 500 MidCap Momentum ETF is a fund that offers diversified exposure to high-performing mid-cap companies. This ETF seeks to track the performance of the S&P MidCap 400 Momentum Index. It includes securities with the highest momentum scores, measured by the upward price movement of the securities as compared to its counterparts. Additionally, XMMO’s momentum-driven approach and diversification across various sectors like industrial, technology, and consumer discretionary has contributed to its outperformance. Presently, the fund’s top 5 largest holdings include Lennox International (NYSE:LII), Manhattan Associates (NASDAQ:MANH), Emcor Group (NYSE:EME), Owens Corning (NYSE:OC) and TopBuild (NYSE:BLD). Another positive note on this ETF is that it is not too heavily concentrated in any one security. As momentum builds in 2024, investors have the potential to achieve higher returns than the Nasdaq in the long run.
On the date of publication, Terel Miles did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.
Terel Miles is a contributing writer at InvestorPlace.com, with more than seven years of experience investing in the financial markets.
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