When evaluating investment performance, the S&P 500 Index is often the benchmark. Let's see what ETFs have outperformed the S&P500 over the past 5 years.
The S&P500 index tracks the performance of 500 of the largest publicly traded companies in the United States, representing about 80% of the total U.S. equity market capitalization. It’s considered a reliable barometer for the overall health and growth of the U.S. stock market. Over the past five years (as of early 2025), the S&P 500 has delivered a compound annual growth rate (CAGR) of approximately 12.3% — a strong performance by historical standards.
However, a number of Exchange-Traded Funds (ETFs) have this benchmark by focusing on high-growth industries, particularly technology, semiconductors, and cryptocurrencies. Below, we explore 7 ETFs that have out performed the S&P 500 in terms of total return over the past five years, along with data points on their returns, holdings, and strategic focus.
1. Invesco QQQ Trust (QQQ)
- 5-Year Total Return: 192.56%
- 5-Year CAGR: 20.60%
- 1-Year Return: 24.9%
- Expense Ratio: 0.20%
- Top Holdings: Apple, Microsoft, NVIDIA, Amazon, Meta Platforms
- Assets Under Management (AUM): $270 billion
QQQ tracks the Nasdaq-100 Index, which includes 100 of the largest non-financial companies listed on the Nasdaq.
This ETF has benefited from a strong tilt toward tech giants and consumer-facing digital firms, which have been primary drivers of market growth.
2. Technology Select Sector SPDR Fund (XLK)
- 5-Year Total Return: 208.52%
- 5-Year CAGR: 22.12%
- 1-Year Return: 44.3%
- Expense Ratio: 0.10%
- Top Holdings: Apple, Microsoft, NVIDIA, Broadcom, Cisco Systems
- AUM: ~$70 billion
XLK captures the technology portion of the S&P 500.
With significant weight in just two companies—Apple and Microsoft—this fund has been a direct beneficiary of the recent tech boom and widespread enterprise digitization.
3. Vanguard Mega Cap Growth ETF (MGK)
- 5-Year CAGR: ~19.74%
- 1-Year Return: 34.1%
- Expense Ratio: 0.07%
- Top Holdings: Apple, Microsoft, NVIDIA, Alphabet, Amazon
- AUM: $20 billion
MGK focuses on large-cap U.S. growth stocks, offering a more diversified version of QQQ with some exposure to non-tech sectors.
This ETF’s performance reflects the dominance of mega-cap growth companies in driving equity returns.
4. Principal U.S. Mega-Cap ETF (USMC)
- 5-Year CAGR: ~18.0%
- 1-Year Return: 32.7%
- Expense Ratio: 0.88%
- Top Holdings: Apple, Microsoft, Amazon, NVIDIA, Alphabet
- AUM: $3 billion
USMC is an actively managed ETF that seeks to maintain quality growth exposure among mega-cap stocks.
Its higher expense ratio reflects its active management style, which has paid off with strong outperformance of the S&P 500.
5. VanEck Semiconductor ETF (SMH)
- 5-Year CAGR: ~29.0%
- 1-Year Return: 43.8%
- Expense Ratio: 0.35%
- Top Holdings: NVIDIA, Taiwan Semiconductor, Broadcom, AMD, Qualcomm
- AUM: ~$13 billion
SMH is the purest play on semiconductors—a sector that’s become the backbone of AI, automotive tech, and cloud computing.
The fund’s exceptional performance has been largely driven by explosive growth in companies like NVIDIA and AMD.
6. Grayscale Bitcoin Trust (GBTC)
- 5-Year CAGR: ~54.1%
- 1-Year Return: 105.8%
- Expense Ratio: 2.00%
- Underlying Asset: Bitcoin
- AUM: ~$27 billion
GBTC offers a proxy for Bitcoin performance and was one of the first vehicles available for institutional crypto exposure.
While volatile, it has vastly outperformed equities during bullish crypto cycles.
As of 2024, it has also converted to an ETF structure, improving liquidity and narrowing its discount to NAV.
7. Vanguard Information Technology ETF (VGT)
- 5-Year CAGR: ~21.5%
- 1-Year Return: 45.2%
- Expense Ratio: 0.10%
- Top Holdings: Apple, Microsoft, NVIDIA, Visa, Mastercard
- AUM: ~$60 billion
VGT includes more diversified exposure to the broader tech industry, including both software and hardware. Its inclusion of payment processors like Visa and Mastercard adds a fintech flavor that has also outpaced broader markets.
Final Thoughts: What This Means for Investors
While the S&P 500 remains a reliable and diversified benchmark for U.S. equities, these ETFs show that targeted strategies—particularly in high-growth sectors—can deliver superior long-term performance.
However, it’s important to remember that with higher reward often comes higher risk.
Sector-specific ETFs are more vulnerable to volatility, regulatory pressures, and valuation swings.
Before investing in these ETFs, make sure to:
- Evaluate your risk tolerance
- Consider sector concentration
- Align with your investment time horizon
Diversification remains key, but for those looking to juice returns, a thoughtful allocation to sector and thematic ETFs can be a powerful addition to a long-term strategy.
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