Billionaires Buy 2 Magnificent Index Funds That a Wall Street Analyst Says Could Soar 132%

Core Insights - Several billionaire fund managers have recently invested in S&P 500 index funds, indicating a strong belief in the potential for significant growth in the index by the end of the decade [1][2] - Tom Lee from Fundstrat Global Advisors predicts the S&P 500 will reach 15,000 by 2030, representing a 132% increase from its current level of 6,460 [2][15] - The S&P 500 index is considered a reliable benchmark for the overall U.S. stock market, encompassing 500 large companies across various sectors [1] Investment Activity - Notable billionaire hedge fund managers have made substantial purchases of S&P 500 index funds in the second quarter, including: - Cliff Asness acquired 72,200 shares of SPDR S&P 500 ETF Trust and 134,800 shares of Vanguard S&P 500 ETF [5] - Israel Englander added 1.2 million shares of SPDR S&P 500 ETF Trust, making it his seventh-largest position [5] - Paul Tudor Jones purchased 1.8 million shares of SPDR S&P 500 ETF Trust, now his largest position, along with 36,700 shares of Vanguard S&P 500 ETF [5] - Tom Steyer bought 5.5 million shares of SPDR S&P 500 ETF Trust, also his largest position [5] Comparison of Index Funds - The Vanguard S&P 500 ETF and SPDR S&P 500 ETF Trust both track the same index, covering about 80% of U.S. stocks and 40% of global stocks by market value [6] - SPDR S&P 500 ETF Trust is noted for its higher liquidity and narrower bid-ask spread, while Vanguard S&P 500 ETF has a lower expense ratio of 0.03% compared to SPDR's 0.0945% [7] Investment Thesis - The S&P 500 has historically provided strong returns, advancing 1,910% over the last three decades, with an annual compounding rate of 10.5% [9] - The index has never declined over any 15-year period since its inception in 1957, ensuring profitability for long-term investors [10] - A significant majority of professional investors have underperformed the S&P 500, with nearly 85% of large-cap funds lagging behind over the last decade [11] Future Outlook - Tom Lee attributes the potential rise of the S&P 500 to two main factors: - The millennial generation, which is entering peak earnings years and is set to inherit over $40 trillion, influencing economic dynamics [15] - A projected global labor shortage of 80 million workers by 2030, driving demand for AI and technology, which constitutes 34% of the S&P 500 by market value [16]