Introduction
When it comes to investing in the stock market, the S&P 500 is often considered the benchmark for measuring performance. However, there are several funds that have consistently outperformed the S&P 500 over the years. In this article, we will take a closer look at some of these funds and what makes them stand out.
What is the S&P 500?
The S&P 500 is an index of 500 large-cap stocks listed on the US stock exchanges. It is widely used as a measure of the overall performance of the US stock market. However, it is important to note that the S&P 500 is not the only benchmark for measuring stock market performance.
The Case for Active Management
While index funds that track the S&P 500 have become increasingly popular in recent years, there is still a case to be made for active management. Active management involves a fund manager making investment decisions on behalf of the fund, with the aim of outperforming the market.
The Benefits of Active Management
One of the main benefits of active management is the potential for higher returns. A skilled fund manager can identify undervalued stocks and take advantage of market inefficiencies to generate higher returns than the market as a whole.
The Risks of Active Management
However, active management also comes with higher fees and the risk of underperformance. Not all fund managers are able to consistently outperform the market, and investors may end up paying higher fees for lower returns.
Funds That Beat the S&P 500
Despite the risks, there are several funds that have consistently beaten the S&P 500 over the years. Here are some of the most notable examples:
The T. Rowe Price Blue Chip Growth Fund (TRBCX)
The T. Rowe Price Blue Chip Growth Fund has consistently outperformed the S&P 500 over the past decade. The fund invests in large-cap growth stocks and has a long-term investment horizon.
The Fidelity Contrafund (FCNTX)
The Fidelity Contrafund is another fund that has beaten the S&P 500 over the long-term. The fund invests in a diversified portfolio of large-cap stocks and has a strong track record of outperformance.
The Vanguard Growth Index Fund (VIGAX)
The Vanguard Growth Index Fund is a low-cost index fund that invests in a portfolio of large-cap growth stocks. Despite its passive approach, the fund has consistently outperformed the S&P 500 over the long-term.
Conclusion
While the S&P 500 is often considered the benchmark for measuring stock market performance, there are several funds that have consistently beaten the index over the years. Active management can provide higher returns, but also comes with higher fees and the risk of underperformance. Investors should carefully consider their options and do their research before investing in any fund.
