Wealthy Individuals Purchase Two Impressive Index Funds, Potentially Primed for a 132% Surge, According to a Wall Street Financial Expert

The S&P 500, one of the three major U.S. stock indexes, is widely regarded as the best benchmark for the overall market due to its scope and diversity, covering 500 large companies from all 11 market sectors. Over the last three decades, the S&P 500 has advanced 1,910%, compounding at 10.5% annually.

Two index funds that track the S&P 500 are gaining attention among investors: the Vanguard S&P 500 ETF (VOO) and the SPDR S&P 500 ETF Trust (SPY). The latter is more liquid, meaning shares are more easily traded, and has seen increased interest from hedge fund managers such as Tom Lee, head of research at Fundstrat Global Advisors, who predicts the S&P 500 could reach 15,000 by 2030.

Lee's optimistic outlook is based on the influence of millennials entering their peak earning years and the global labor shortage driving demand for artificial intelligence. Millennials, the largest living generation, are set to inherit over $40 trillion, the largest generational wealth transfer in history. Additionally, nearly 85% of large-cap funds underperformed the S&P 500 over the last decade, and nearly 90% underperformed over the last 15 years.

The Vanguard S&P 500 ETF has a lower expense ratio than the SPDR S&P 500 ETF Trust, at 0.03% compared to 0.0945%. Despite this, the SPDR S&P 500 ETF Trust has seen significant investments from several prominent figures, including Israel Englander at Millennium Management, who added 1.2 million shares, and Paul Tudor Jones, who purchased 1.8 million shares, as well as Cliff Asness at AQR Capital Management and Tom Steyer at Farallon Capital Management.

Owning an S&P 500 index fund can hedge against underperformance by individual stocks, making it an attractive option for investors with a time horizon of at least three to five years. The technology sector, which accounts for 34% of the S&P 500 by market value, is expected to experience a parabolic move due to the demand for artificial intelligence.

As of today, the S&P 500 Index's Change is (-0.64%) and the Current Price is $6,460.26. For those considering an investment in S&P 500 index funds, the investment thesis suggests that most investors should own one if they prefer individual stocks and have a time horizon of at least three to five years.

Wealthy Individuals Purchase Two Impressive Index Funds, Potentially Primed for a 132% Surge, According to a Wall Street Financial Expert