What ETFs did well in 2024?

D.O.G.E. is allegedly firing thousands of IRS employees, but that doesn’t mean you don’t have to do your taxes. Please, still do your taxes.

The stock market had another fantastic year in 2024. In keeping with our roots of helping people take control of their finances, I wanted to highlight the performance of some of my favorite ETFs. As always, past performance doesn’t guarantee future results.

Let’s start with a quick snapshot of major indexes 2024 performance for a benchmark:

SCHG - Large Cap Growth ETF

• 2024 Performance: 34.95%

• 0.04% Expense Ratio

This is a rockstar ETF and the backbone of my Roth IRA. When I detailed how I invested my Roth IRA, SCHG was 30% of my portfolio, but now it is 38% after its insane growth. This fund can beat the S&P 500 by compiling 229 growth focused companies from the index and cutting the rest. The smaller number of companies increases the risk, but I am willing to live on the edge for these returns. 

VBK - Small Cap Growth ETF

• 2024 Performance: 16.5%

• 0.07% Expense Ratio

Small cap stocks did fantastic in 2024. If you scoff at 16% growth, you need some humbling. You don’t want 100% of your portfolio in any category (i.e. large cap companies). Diversity helps ensure you mitigate risk. It won’t save you if we enter a 2008 style recession in 2025, but over a 20+ year investing life, diversity will help ensure steady growth. Can you believe it? A white guy that believes in diversity!

SCHF - International Equity ETF

• 2024 Performance: 3.29%

• 0.06% Expense Ratio

While US stocks continued to soar in 2024, international stocks lagged under high inflation and poor economic conditions. Russia’s invasion of Ukraine continues to destroy the European energy market hurting families and businesses. Japanese companies, which make up 22.5% of this ETF, struggled with a weak currency.

If you’re wanting to dump international stocks, check out this asset class return interactive chart.

Long story short, this is more proof that diversity is good in the long term. There are plenty of years where international stocks beat US based companies.

QQQ - Big Tech

• 2024 Performance: 25.58%

• 0.2% Expense Ratio

Invesco QQQ is the official ETF of the Georgia Bulldawgs, or that’s what I think the TV ads told me during football games. Therefore, it is easily the best ETF, and if another ETF beats it, that’s because the NASDAQ is just different. Companies in the S&P 500 just don’t understand what it’s like to play in the NASDAQ.

QQQ performance is hard to beat. However, what used to be a unique concentration of tech companies has become ubiquitous in every ETF. The top ten holdings of QQQ mimic every other Large Cap ETF. If you own SCHG, VOO, or another S&P 500 ETF, you should look for diversity in other areas like small/mid cap companies, international, or REIT ETFs.

SCHD - Dividend ETF

• 2024 Performance: 11.67%

• 0.06% Expense Ratio

With a 3.7% dividend, SCHD is an appealing ETF that offers true passive income, quarterly. Although, the 11.67% growth assumes reinvested dividends. I’ve ranted about “dividend hunting” before. You sacrifice value for a quarterly dopamine hit. On the other hand, SCHD’s top ten holdings have 0 similarities with QQQ. You are not double dipping by owning both SCHD and VOO/QQQ/SCHG. 

SOXX - Semiconductor ETF

• 2024 Performance: 12.92%

• 0.35% Expense Ratio

Semiconductors…. So hot right now. Well, not as hot as 2023, when SOXX grew by a whooping 67%, but still pretty hot. The expense ratio is high, but of the top ten holdings, I’d be willing to bet you’ve only heard of four of the companies. KLA Corp? Lam Research Corp? I’ve never heard of them, I don’t know what they do, and I don’t care. Diversity. I am willing to pay a higher expense ratio when the ETF invests me into a more specific sector with companies I’d never invest in on my own. 

This is by no means a comprehensive list or comparison of every ETF. This is simply a snapshot of several of my favorite ETFs. I didn’t cover VOO, VTI, SCHK, indexed mutual funds, or target date funds that offer fantastic returns, diversity, and simplicity. 

Debrief on Deck

Next week is yet another Monthly Market Debrief. Spoiler alert, cupid shot his inflation arrow instead of the love arrow at the economy, classic mixup.

As always, please reach out to us with any questions or comments you have. You can reply directly to this email or find us on Instagram.

Until then, stay the course.

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