Six ETFs That Have Quietly Crushed the S&P 500

The S&P 500 is one of the greatest investment products ever built. Over its history it has averaged roughly ten percent a year. But here is the question worth sitting with. What if you could do just slightly better? Not double the return. Not some moonshot. Just a few percentage points a year more than the index. The answer, when you actually run the math, is the difference between a comfortable retirement and a generational one.

Take a single $10,000 investment that you never add another dollar to. At ten percent a year for thirty years, that grows to about $174,000. At thirteen percent, $395,000. At fifteen percent, $662,000. At seventeen percent, almost $1.1 million. Same starting capital, same time horizon, different vehicle. The compounding does the work. Add a few hundred dollars a month for thirty years and the gap stretches even wider.

The obvious caveat. Anytime you reach for higher returns, you generally accept more risk. Past performance does not guarantee future performance. You will lose money at some point. Nothing in this article is personal financial advice. What follows is simply a set of exchange traded funds that have, over the past decade, beaten the S&P 500.

Why the S&P 500 Works in the First Place

Quick refresher. The S&P 500 is the basket of the 500 largest U.S. listed companies. When you buy a fund like SPY or VOO, you own a slice of all of them at once. If one slips and falls out of the top 500, the index quietly replaces it. That self cleaning quality is the reason the index has averaged about ten percent annually over a century that included sixteen recessions and twenty five market crashes. The trick was always to keep buying through the bad years, not run for the door.

Six Funds That Have Outpaced the Index

The first is VOOG, the Vanguard S&P 500 Growth ETF. It owns the same S&P 500, but only the growth half. The slower, value oriented names get filtered out. Over the trailing ten years, VOOG has returned roughly sixteen percent annually. The S&P 500 itself has done about fifteen percent over the same window once you include reinvested dividends. Modest edge, but modest edges compounded for decades are exactly the point.

The second is XLK, the Technology Select Sector SPDR. It holds only the technology names within the S&P 500, around sixty five to seventy companies including Apple, Microsoft, Nvidia, and Broadcom. Over the past ten years, XLK has compounded at roughly twenty two percent annually. If you believe technology continues to dominate corporate earnings, this is one of the cleanest ways to lean into that view without picking individual stocks.

The third is PPA, the Invesco Aerospace and Defense ETF. Lockheed Martin, RTX, Boeing, General Dynamics, and the rest of the prime contractors. Over the trailing ten years, PPA has returned roughly eighteen to nineteen percent annually. The thesis is structural. Defense budgets do not shrink during recessions, and any time geopolitical tensions rise, more money flows into the sector. You may have moral feelings about the industry, and that is legitimate. A good investment has to make financial, legal, and moral sense to the person making it. The last one is yours to decide.

The fourth is SPMO, the Invesco S&P 500 Momentum ETF. It holds roughly the top hundred S&P 500 companies ranked on price momentum, rebalancing periodically to chase whatever is currently working. The strategy is risky because momentum reverses sharply at market turns. But the universe is restricted to S&P 500 companies, which keeps quality reasonable. Over the trailing ten years SPMO has compounded at roughly nineteen percent annually.

The fifth is SMH, the VanEck Semiconductor ETF, and it has frankly outrun everything else on this list. SMH owns the companies building the chips inside your phone, your car, the data centers powering AI, and the guidance systems in modern weapons. As of the trailing ten years ending March 2026, SMH has compounded at roughly thirty one percent annually. That is not a typo. There is talk of an AI bubble, and that talk may eventually prove right, but the picks and shovels case for semiconductors does not depend on any one model winning. Whatever AI becomes, it runs on chips.

The sixth is QQQ, the Invesco fund tracking the Nasdaq 100, the largest hundred non financial companies on the Nasdaq exchange. In practice that means a heavy concentration of technology and consumer growth names. Over the past ten years, QQQ has compounded at roughly twenty to twenty one percent annually. The same concentration that gives QQQ its upside also makes it more volatile than the broad market. It tends to fall harder in selloffs and rip higher in rallies. Knowing that going in is the difference between holding through a drawdown and panic selling at the bottom.

The Strategy That Makes Any of This Work

None of the six funds matter if your behavior gets in the way. The mistake most investors make is buying when markets feel safe and selling when markets feel scary, which is exactly backwards. The simpler approach is what some people call ABB, always be buying. Money leaves your checking account on a schedule and gets invested no matter what the headlines say. The only adjustment worth making is to buy more aggressively when markets fall, not less. In 2022 the S&P 500 fell twenty percent. In 2020 it fell thirty four percent. In 2008 it got cut roughly in half. Each was a buying opportunity that most people missed because they were too scared, or because they had spent the cash they should have kept in reserve.

Market crashes are not the exception to long term wealth building. They are the mechanism. Sixteen recessions and twenty five crashes over the past century did not stop the index from averaging ten percent a year. They just rewarded the people who kept their nerve. Slightly better returns, applied patiently over decades, can quietly become extraordinary outcomes. The funds above are simply examples of where that edge has shown up over the past ten years. Whether they keep that edge over the next ten is the open question, and one only you can answer for your own portfolio.

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This article is written for educational and informational purposes only and does not constitute financial or legal advice. The views and analytical frameworks presented draw on publicly available information and reported commentary from industry participants. Readers are encouraged to consult primary sources and form their own informed views on these complex topics.