Some leading investment strategists see a sluggish period ahead for the S&P 500, citing higher-for-longer interest rates and overvalued large caps, with a 10-year CAPE ratio above 40, the highest since the dot-com boom. The author argues the iShares Global Equity Factor ETF (GLOF) could beat the S&P 500 over the next decade: it is a global fund with 61% in U.S. stocks and 7% in Japan, holding stocks with the highest scores on momentum, quality, value, low volatility and size. The fund holds 684 stocks, with Apple, Nvidia and Microsoft as its largest positions. Over the past 10 years its annualized total return was 12% versus 15.4% for the S&P 500, but over the past one and three years it has outperformed: 15.8% vs 13.5%, and 24.1% vs 23.7%.
Summary written by Upside AI from the original article. Read the source for full details.
Read the original on Yahoo Finance ↗
Keywords
ETFS&P 500valuationinterest rates
Open a keyword to see other news on the same topic.
Related tickers and likely impact
QQQ
• NeutralInvesco QQQ Trust
Relevance: low
| Market | US stocks |
|---|---|
| Sector | ETF |
| Close on 10/28/2026 | 725.59 |
| Change that session | +0.60% |
Impact is scored by AI from the headline and may be wrong. It is not investment advice.
Related news
- Is AI Overhyped? Apollo Economist Sees “Zero Financial Payoff” Beyond Tech Companies
Apollo Global Management Chief Economist Torsten Slok published new research on Saturday arguing that AI has delivered “zero financial payoff to corporate America outside of tech.” Slok's analysis finds revenue per worker and profit margins rising for the Magnificent Seven but flat for the other 493 S&P 500 companies, despite hundreds of billions of dollars in AI data center spending by major tech firms. The article says overvalued tech stocks could face pressure if AI spending is cut or investors doubt broad economic gains, while Vanguard research is more optimistic about AI adoption across industries. It also notes that a broadly diversified S&P 500 fund could be seen as a “safer” bet than a tech-heavy ETF, citing the Vanguard S&P 500 ETF's annualized return of about 13.8% over five years, including the 2022 bear market when the S&P 500 fell about 18.2%.
- Why Investing in S&P 500 Index Funds Is a Whole Lot Riskier These Days
The article argues that investing in S&P 500 index funds is riskier now, mainly because the index is heavily tilted toward tech. Nvidia, Apple, and Microsoft make up about 22% of the Vanguard S&P 500 ETF (VOO), rising to nearly 40% for its top 10 holdings, all of which have AI exposure. The author warns that an AI bubble may already have formed, and a prolonged downturn could take several years to recover from, a wait many investors may not be able to afford. As alternatives, the article suggests considering ETFs that track dividend stocks or defensive sectors, which may be less vulnerable to sharp declines.
- History Says a Stock Market Sell-Off Is Coming Eventually. Here's the Smartest ETF to Buy Right Now.
The article says the S&P 500 is up 78%, the Nasdaq Composite 99% and the Dow 53% over the past three years, but warns that the Shiller CAPE ratio has risen sharply to nearly 41, far above its historical average of 17.8, which it says signals overvaluation. It notes that most recent gains are concentrated in AI stocks: the S&P 500 is up 17% over the past year, yet four in 10 of its stocks have fallen this year. As a long-term strategy, the article suggests the Vanguard S&P 500 ETF (VOO), which diversifies across sectors, and notes the S&P 500 has averaged 10.5% annual gains since 1957. Citing J.P. Morgan research over 20 years, it argues that staying invested during downturns has historically produced higher returns, since 7 of the 10 best market days occurred within two weeks of the 10 worst days.
- Afraid of a Stock Market Crash? 4 Great ETFs to Buy Regardless.
Valuation gauges such as the CAPE ratio and the total market cap-to-GDP ratio are at worrying levels, and investors including Michael Burry and Ray Dalio have called for a correction. The article cites Peter Lynch's view that more money is lost preparing for or anticipating corrections than in the corrections themselves, and his 1995 figures showing that investing every Jan. 1 from 1965 to 1994 returned 11% a year on average, versus 10.6% when investing at each year's peak. It then suggests four ETFs for dollar-cost averaging: the Vanguard S&P 500 ETF (VOO), with a 15.7% average annual total return over 10 years; the Invesco QQQ Trust (QQQ), up 21.1% on average over the past decade; the Global X Artificial Intelligence & Technology ETF (AIQ), averaging 33.6% a year over the past three years; and the Schwab U.S. Dividend Equity ETF (SCHD), with a 3.4% yield and a 31.4% year-to-date gain.
- AI Bubble or Not, Warren Buffett Would Buy This Vanguard Index Fund
The S&P 500 gained 24% in 2023, 23% in 2024 and about 16% in 2025, with much of the rally driven by AI enthusiasm concentrated in a small group of tech stocks. The Shiller CAPE ratio is around 41 versus a historical average near 17, a level reached only in a few periods, most notably the dot-com bubble. Warren Buffett favored a low-cost S&P 500 index fund over trying to time corrections, and Berkshire Hathaway bought 43,000 shares of the Vanguard S&P 500 ETF (VOO) in late 2019, holding them for roughly five years. With a 0.03% expense ratio and exposure to hundreds of businesses, the article argues VOO remains a compelling long-term holding, while the S&P 500 has returned about 10% annualized from 1928 to 2025.
- Vanguard's Growth ETF Usually Beats the Market After a Lagging Year. I'd Own It, but Not for a 2027 Rebound.
The Vanguard Morningstar Growth ETF (VUG) hit a record of $92.64 on Oct. 6 but has since fallen about 6% to roughly $87, while the S&P 500 is down less than 3% over the same period. The fund is up about 7% in 2026 versus about 11% for the index, and if the gap holds through December, it would be the first year since 2022 that it trails the S&P 500 on price alone. The fund holds a large share of its assets in its top 10 stocks, many of them tech companies, and several, including Tesla (down about 17%), are lagging this year. Rising interest rates also weigh on growth stocks, since their value depends on profits expected far in the future. The author notes the fund has beaten the S&P 500 in 16 of 21 years from 2005 to 2025, but says he would not rely on 2027 to erase this year's gap.
Related markets
Latest news
- Oracle Is Up 12% in a Week. Is Its Free Cash Flow Plan Really That Good?
Oracle shares rose 12% over the past week after its Investor Day, where the company said it expects positive free cash flow in the second half of fiscal 2028 and over $30 billion in fiscal 2029, versus a consensus of $5.9 billion. New capital raises through fiscal 2030 are capped at $20 billion, less than half the $50 billion to $60 billion Evercore estimated for its AI buildout. The main risk cited is that S&P puts OpenAI at about half of Oracle's backlog. With forward earnings at about 17x versus a 21x five-year average, the author takes a positive view of Oracle for patient investors, with second-quarter results in mid-December as the first test.
- Amazon earnings live: AI growth takes center stage
Amazon (AMZN) will report third-quarter results on Thursday, a day after Google (GOOG, GOOGL) posted disappointing earnings that sent its shares down more than 12%. Microsoft (MSFT), which reported better-than-expected results on Wednesday, saw its stock rise. According to Bloomberg analyst consensus, Amazon is projected to post EPS of $1.97 on revenue of $202.25 billion, versus EPS of $1.95 and revenue of $180.16 billion a year earlier. AWS revenue is expected at $45.68 billion, up 38% from $33 billion in Q3 2025, with online store sales at $69.6 billion (up 3%) and advertising at $20.91 billion (up 18%). Investors will also watch capital expenditures tied to the AI buildout; a pullback could lift Amazon's stock but pressure the broader AI industry, including chipmakers and neocloud providers.
- Aon CEO warns AI data center insurance risks could threaten financing
Aon CEO Greg Case warned in a CNBC interview that concentrating billions of dollars of AI equipment and computing capacity in a few locations creates concentration risk that could make projects harder to insure and force financing structures to change. He said data center business interruption could be measured in millions of dollars per minute. Aon reported a record data center project pipeline, 7% organic revenue growth in its commercial risk business, and adjusted EPS up 10% to $3.36 in the third quarter. Aon's pending $17 billion acquisition of USI Insurance Services, expected to close in the fourth quarter, is expected to bring $395 million in annual earnings benefits. Case believes the global insurance industry's roughly $4.5 trillion in capital must double or triple to meet growing cyber, AI and data center risks.
- We're raising our price target on Eli Lilly as the obesity-drug boom rolls on
Eli Lilly shares rose over 6% to about $1,370, a record closing high, after third-quarter revenue jumped 39% year over year to $24.4 billion, above the LSEG consensus of $22.6 billion. Adjusted EPS rose 6.6% to $7.48, beating analysts' $6.26 estimate, though a sizable acquisition-related accounting charge held back annual profit growth. Adjusted gross margin reached 84.4%, up from 83.6% a year earlier. Mounjaro revenue climbed 65% to $10.7 billion and Zepbound rose 49% to $5.35 billion, as higher patient volumes more than offset lower realized prices. The price target was raised to $1,500 from $1,300 and the 2 rating was reiterated, with shares up more than 50% since the April 29 close.
- AbbVie Stock: What 10 Years of Growth and Dividends Did for $1,000
AbbVie was spun off from Abbott Laboratories on January 1, 2013, and relied heavily on Humira until the drug lost U.S. exclusivity in early 2023. In Q2 2026, Humira sales fell 35.9% to $756 million, while Skyrizi rose 24.4% to $5.505 billion and Rinvoq rose 24.5% to $2.525 billion. The quarterly dividend grew from $0.57 in 2016 to $1.73, with a forward annual dividend of $6.92 and a yield of roughly 2.30%. A $1,000 investment 10 years ago would be worth $7,464.50 including dividends, a 646.45% total return, versus 263.37% for the S&P 500 on a price-only basis. The article notes the shares closed at $197.99 on April 29, 2026, reached about $291.48 this morning, and trade above the average analyst target of $283.19, while also flagging negative shareholders' equity and a forward P/E of about 18.
- $11 Billion in Bitcoin Options Expire Tomorrow—Here's What It Means
About $11 billion in Bitcoin options, roughly 135,000 BTC and a third of Deribit's Bitcoin options open interest, expire on Friday. Max pain sits at $78,000 against a market price near $81,500, and about 86% of contracts are out of the money. The Fed held rates at 3.75% to 4% on Wednesday in a 10-2 vote, with two dissenters favoring a hike, while the 10-year Treasury yield closed at 5.05%. Of the expiring contracts, roughly 88,700 are calls and 46,500 are puts, a put-to-call ratio of 0.52. Because the $11 billion is notional value, settling at today's price would move about $130 million, roughly 1% of the headline figure. Heaviest call strikes sit at $95,000 and $100,000, with the biggest put cluster at $70,000, and the next expiry on December 25 covers about 135,500 BTC.
Get the briefing on Telegram or Zalo
Join the Upside Telegram channel or Zalo group for the Vietnam stocks and gold briefing at 8:00 and 19:00 (Vietnam time) on trading days, plus a weekly wrap on Saturday morning.