Stock-market investing can be interesting and challenging. Reviewing index returns over a period such as five years may help describe past market behavior, but it does not establish what will happen next. This article surveys passive indices mentioned in the source and notes considerations for each.
Five-year overview of global passive indices
Passive investing seeks returns close to a selected market index. In the period discussed by the source, several indices grew, especially U.S. equities.
U.S. equity indices: QQQ and VUG
U.S. growth and technology-focused indices such as QQQ and VUG showed notable growth during the period described. The source attributes part of this to innovation and the expansion of major technology companies.
The Nasdaq index
The source describes strong historical performance for the Nasdaq and connects it with the role of leading U.S. technology companies in the global economy.
S&P 500 and VOO
The S&P 500 represents large U.S. companies; VOO is an ETF that tracks it. The source describes its five-year performance as positive.
MSCI World
MSCI World covers equities across developed markets and may be considered by investors seeking exposure beyond one country.
ACWI: global equities including emerging markets
The All Country World Index covers companies in developed and emerging markets, giving broader market exposure than a developed-market-only index.
VTV: value stocks
VTV focuses on value stocks, which the source describes as companies whose fundamentals may be valued below their market price. The index can have different exposures and risks from growth-focused indices.
VYM and SCHD: dividend stocks
VYM and SCHD focus on dividend-paying stocks. Dividends can change and are not guaranteed.
Indices excluding the United States
The source says indices without U.S. equities may have returned less than U.S.-inclusive indices in the period it discusses. Results depend on the exact dates and measure used.
Thai stocks
The source characterizes Thai-stock performance over the same general period as weaker than some other indices.
Passive and active approaches
Passive and active investing have different advantages and drawbacks. A suitable approach depends on an investor’s goals and ability to bear risk.
Indices highlighted by the source
The source singles out several indices based on its retrospective comparison.
QQQ: Nasdaq-100 exposure
The source calls QQQ a top performer and links its growth to large technology companies including Apple, Microsoft, Amazon, Google and Facebook.
VUG: growth stocks
The source describes VUG as another growth-oriented fund with strong historical performance.
VOO: S&P 500 exposure
The source describes VOO’s five-year performance as notable and presents it as exposure to large U.S. companies.
MSCI World: developed-market equities
MSCI World covers equities in developed markets. The source presents it as an option for broader geographic exposure.
ACWI: global equities including emerging markets
ACWI also includes emerging markets, unlike a developed-market-only index.
VTV: value stocks
VTV focuses on value stocks and has different exposure from growth-oriented indices.
VYM and SCHD: dividend stocks
VYM and SCHD focus on dividend-paying stocks; dividend payments are not guaranteed.
Comparing returns across indices
The source compares historical performance across several index groups.
Highest returns: U.S. technology stocks
For the period discussed, the source calls U.S. technology-focused indices such as QQQ and VUG the strongest performers.
MSCI World compared with other indices
The source says MSCI World performed well relative to some indices focused on a single market.
Indices excluding the United States
The source says indices without U.S. equities may have returned less than those that include them in its comparison.
Thai stocks
The source characterizes Thai-stock returns as relatively weak compared with other indices during the period.
Considerations for active investing
The source characterizes active investing as making security-selection or trading decisions to seek returns and says it can carry greater risk than a passive approach.
Passive investing
The source presents passive investing as a relatively simple, lower-cost approach that may suit many investors. It is not suitable for every goal or risk profile.
Active investing
Active strategies can underperform passive benchmarks and may involve higher costs and risk.
Research before investing
Understand the index, fund, costs, holdings and risks before making an investment decision. Historical returns do not guarantee future performance.
- The source highlights U.S. technology indices for its historical five-year comparison.
- It also discusses MSCI World and other global exposures.
- The article’s preference for passive investing is a general source view, not individualized advice.
- Active investing can involve higher risk and may underperform.
- Review the data and methodology before using any historical comparison.
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