Experts are bullish on the S&P 500 in 2026: why SPYM beats SPY & VOO ETFs

Core Viewpoint - The S&P 500 Index is expected to continue its strong performance in 2026, with analysts predicting significant gains driven by various catalysts, including IPOs from major private companies and potential interest rate cuts by the Federal Reserve [1][4]. Group 1: Analyst Predictions - Oppenheimer has the most optimistic target for the S&P 500 Index at $8,100, while Deutsche Bank and Capital Economics predict it will reach $8,000 [2]. - Morgan Stanley and Wells Fargo forecast the index will rise to $7,800, with other firms like RBC Capital Markets and Goldman Sachs expecting it to exceed $7,500 [3]. Group 2: Catalysts for Growth - Major private companies such as OpenAI, Anthropic, and SpaceX are expected to launch IPOs, which may stimulate more listings and contribute to the index's growth [3]. - The Federal Reserve is anticipated to continue cutting interest rates, making equities more attractive compared to government bonds, which previously contributed to the index's rise [4]. - Strong corporate earnings are projected, with S&P 500 companies having recorded double-digit growth for four consecutive quarters [4]. Group 3: Economic Indicators - The US economy has returned to growth, with GDP expanding by 4.3% in the third quarter, which supports the outlook for high earnings [5]. - The ongoing AI boom, led by companies like Nvidia and Broadcom, is expected to further bolster market confidence and invalidate fears of an AI bubble burst [5]. Group 4: Investment Strategies - The State Street SPDR Portfolio S&P 500 ETF (SPYM) is highlighted as a better investment option compared to the more popular Vanguard S&P 500 Index ETF (VOO) and SPDR S&P 500 ETF (SPY) due to its lower expense ratio of 0.02% [6][8]. - VOO has seen significant inflows, totaling over $137 billion in the last 12 months, bringing its assets to over $839 billion, while SPY and IVV follow with $717 billion and $766 billion respectively [7].