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Moving Averages of the Ivy Portfolio and S&P 500: September 2025
Etftrends· 2025-10-01 22:21
Ivy Portfolio Overview - The Ivy Portfolio is based on the asset allocation strategy used by endowment funds from Harvard and Yale, constructed with 5 ETFs to achieve diversification and reduce risk [2][5] - The portfolio consists of domestic stocks, international stocks, bonds, real estate, and commodities [10] Ivy Portfolio Strategy - The strategy involves creating a diversified portfolio with equal weight across major asset classes, calculating a 10-month moving average of closing prices, and adjusting positions based on whether funds close above or below their moving averages [3][5] - At the end of September, all five ETFs in the Ivy Portfolio remained in an "invest" position, as none closed below their 10-month or 12-month simple moving averages [5][7] S&P 500 Performance - The S&P 500 closed September with a monthly gain of 3.5%, marking the fifth consecutive month of gains, and closed 10.3% above its 10-month simple moving average [8][10] - The index also closed 10.9% above its 12-month simple moving average, indicating a strong performance and maintaining an "invest" position [12] Moving Averages Strategy - Utilizing a moving average strategy can effectively manage the risk of severe losses during bear markets, with the S&P 500's performance since 1995 demonstrating the strategy's effectiveness in capturing upside while reducing losses [9][10] - The 10-month exponential moving average (EMA) has produced fewer whipsaws compared to the simple moving average, closing 9.2% above its 10-month EMA in September [13] Conclusion - All three moving average approaches (10-month SMA, 12-month SMA, and 10-month EMA) remained in an "invest" position at the end of September, reflecting a positive market trend [14]
5 Best Vanguard ETFs to Buy Now
The Motley Fool· 2025-09-17 10:15
Core Insights - Exchange-traded funds (ETFs) have reached $10.3 trillion in U.S. assets, yet many investors still overpay for basic market exposure [2] - Vanguard's unique investor-owned structure allows it to offer lower expense ratios, such as 0.03% for its S&P 500 fund, significantly undercutting competitors [2][5] - The difference in expense ratios can lead to substantial long-term wealth retention, with a 0.03% fee allowing investors to keep 97% of their returns compared to higher fees [3] Vanguard S&P 500 ETF (VOO) - The Vanguard S&P 500 ETF has an expense ratio of 0.03%, equating to a fee of $3 per year on a $10,000 investment, and has delivered a total return of 16% over the past year [5] - This fund is a core holding in portfolio construction, with major tech companies like Apple, Microsoft, and Nvidia making up over 20% of its holdings [6] - The fund offers a 1.16% dividend yield, which can be reinvested to compound returns over time [6] Vanguard Growth ETF (VUG) - The Vanguard Growth ETF has an expense ratio of 0.04% and targets 200 leading growth companies, returning nearly 25% annually over the past three years [8] - The fund includes profitable companies like Amazon and Alphabet, providing growth exposure without high active management fees [9] Vanguard Information Technology ETF (VGT) - The Vanguard Information Technology ETF has an expense ratio of 0.09% and focuses on the tech sector, which has been a major driver of market earnings growth [10] - The fund has delivered annualized returns of nearly 27% over the past three years, with the top 10 holdings representing about 60% of its assets [11] Vanguard Real Estate ETF (VNQ) - The Vanguard Real Estate ETF offers REIT exposure with a 0.13% expense ratio and yields about 3.5%, providing diversification and income generation [12] - Historically, REITs have outperformed during periods when the Federal Reserve cuts rates, making this fund a strategic choice for investors [13] Vanguard Small-Cap Value ETF (VBR) - The Vanguard Small-Cap Value ETF charges an expense ratio of 0.07% and provides access to 835 smaller companies trading at discounted valuations [14] - This segment has historically delivered the highest risk-adjusted returns, offering better risk-reward balance compared to large-cap growth stocks [15]
If You'd Invested $1,000 in Vanguard Real Estate ETF (VNQ) 5 Years Ago, Here's How Much You'd Have Today
The Motley Fool· 2025-08-26 09:48
Core Insights - The real estate sector has significantly underperformed compared to the S&P 500 over the past decade, with a $1,000 investment in the Vanguard Real Estate ETF (VNQ) growing to approximately $1,770, while the same investment in the Vanguard S&P 500 ETF (VOO) would have grown to $3,900 [1][2] Performance Comparison - The S&P 500 has experienced an impressive bull run, achieving annualized total returns of about 14.6% over the last ten years, making it challenging for the real estate sector to keep pace [4] - The real estate sector's performance is notably affected by interest rates, as it is one of the most rate-sensitive sectors in the market [5] Interest Rate Sensitivity - The Federal Reserve has implemented two extended periods of rate increases over the past decade, with the benchmark federal funds rate now over 400 basis points higher than it was ten years ago [5] - Real estate investment trusts (REITs) typically outperform in falling or zero-rate environments but struggle when interest rates are high or rising [5][6] Economic Implications - Rising interest rates increase borrowing costs for REITs, which often rely heavily on debt for growth, similar to how individuals use mortgages to purchase homes [6] - Higher rates can negatively impact commercial real estate property values, which generally have an inverse relationship with risk-free interest rates, leading to potential declines in the value of properties owned by REITs [6][7]
1 Reason to Buy the Vanguard Real Estate ETF (VNQ)
The Motley Fool· 2025-08-23 12:11
Core Viewpoint - The real estate sector has significantly underperformed the S&P 500 over the past decade, but the environment is expected to improve, particularly with anticipated interest rate reductions by the Federal Reserve [1][4]. Group 1: Performance Comparison - The Vanguard Real Estate ETF (VNQ) delivered a total return of 77% over the past decade, while the Vanguard S&P 500 ETF (VOO) achieved a remarkable 290% return [1]. - The underperformance of real estate investment trusts (REITs) is attributed to the exceptional performance of the S&P 500, especially driven by megacap technology stocks [2]. Group 2: Impact of Interest Rates - REITs are highly sensitive to interest rate changes, with rising rates making borrowing less attractive and negatively impacting growth [4][6]. - The expectation of gradually lowering interest rates by the Federal Reserve could create a more favorable growth environment for REITs, potentially attracting investor interest back into the sector [5][4]. - Higher interest rates can lead to lower commercial real estate values, as they affect expected rental income potential and risk-free rates [6].
All-Time Highs for Stocks: These 2 ETFs Still Look Undervalued
The Motley Fool· 2025-07-14 09:52
Core Insights - The S&P 500 has reached a new all-time high, but not all ETFs are performing similarly, with some down by 10% or more from recent peaks [1] - The Vanguard Real Estate ETF (VNQ) has underperformed compared to the S&P 500 over the past decade, with a total return of 73% versus 264% for the S&P 500 [3] - The Vanguard International High Dividend Yield ETF (VYMI) has reached a new high but is considered inexpensive compared to U.S. high dividend stocks [7][9] ETF Performance - The Vanguard Real Estate ETF is highly sensitive to interest rates, with higher rates increasing borrowing costs and negatively impacting commercial property values [5] - Experts predict a downward trend in interest rates over the next couple of years, which could benefit the Vanguard Real Estate ETF [6] - The Vanguard International High Dividend Yield ETF holds about 1,550 companies outside the U.S. with a 4.1% dividend yield, including well-known companies like Toyota and Nestle [8] Valuation and Growth - The average stock in the Vanguard International High Dividend Yield ETF's index has seen earnings growth of 13.7% annually over the past five years and trades at a low valuation of 12 times earnings [9] - In contrast, the U.S. counterpart Vanguard High Dividend Yield ETF (VYM) has an average P/E of over 19 and slower earnings growth [9] - Despite risks associated with international stocks, the significant valuation gap presents a potential buying opportunity [10] Investment Strategy - All three mentioned ETFs are viewed as attractive long-term investments, with expectations of strong performance over the coming years rather than short-term gains [11]
3 Beaten-Down ETFs I'm Buying Hand Over Fist Now
The Motley Fool· 2025-04-28 10:11
Market Overview - The S&P 500 and Nasdaq-100 indices are currently about 10% and 13% below their respective peaks from 2025, indicating they are out of bear market territory [1] - Some index funds and actively managed ETFs remain in bear markets, defined as being 20% or more below their highs [1] Small-Cap Stocks - Small-cap stocks are trading at their lowest price-to-book valuations relative to large-cap stocks in over 25 years, with the gap widening since the start of 2025 [2] - The average stock in the Russell 2000 small-cap index has a price-to-book multiple of 1.8, compared to 4.6 for the typical S&P 500 stock [3] Investment Vehicles - The Vanguard Russell 2000 ETF (VTWO) is highlighted as a preferred investment option due to its low expense ratio of 0.07% and its diversified holdings across 2,000 small-cap stocks [4] - The Vanguard Real Estate ETF (VNQ) is currently 25% below its all-time high, affected by the rising-rate environment that has placed REITs in a technical bear market [5][6] Real Estate Sector - Elevated interest rates negatively impact REITs by making risk-free returns more attractive, increasing the cost of capital, and leading to declines in commercial property values [6] - There is potential for a turnaround in the real estate sector, with expectations of four 25-basis-point Federal Reserve rate cuts by year-end, alongside a 4.2% yield from the VNQ ETF [7] Technology Sector - The Ark Autonomous Technology & Robotics ETF (ARKQ) is an actively managed ETF that focuses on AI investment opportunities, differing from traditional AI index funds by not being top-heavy with big tech stocks [8][9] - The ETF is currently about 18% below its 2025 peak and 30% below its all-time high, presenting a potential investment opportunity for those interested in AI [10]