Is SPLG a good enough ETF for S&P500?

[Out-to-Lunch]

And now from that link I've learned that Leveraged S&P 500 ETFs exist! Oh my, I wonder if it would be insane to put a couple hundred dollars in one. It seems kind of like gambling?

Hahaha


I relate to that wonder! When I first learned about UPRO ( 3X the performance of the S and P 500) I was like "why shouldn't I just put all my money in that" given long term you most likely

would do really well, but then I realized that IF we had some 30-40% crash the whole investment would be worthless. I'm an aggressive investor, but that I could not live with!

You should at least read about "volatility drag."

 

[Route246]

If you are reading these forums you have enough so that it doesn't matter. For all intents and purposes they are the same. Expense ratio is 0.02%. Other than that you're talking about noise compared to any other S&P500 tracker. Quiet noise, at that.

 

[mrfeh]

I like FXAIX, but I feel kind of frustrated by the way mutual funds trade, I think ETFs are more instant gratification and have the ability to set limit orders which I don't think mutual funds do (unless I just don't know how on Fidelity website).

It looks like SPLG is an S&P500 index ETF, so does that mean it will perform the same as FXAIX only with the added benefits of not having to wait until the day is over for the trade to complete?

Does anybody here have it, does it seem like a good ETF?

"Instant gratification" really shouldn't be a concern when it comes to investing.

If you're at Fidelity, I suggest FXNAX. If you are reasonably sure you won't be leaving Fidelity, FZROX is another option.

 

[rayvt]

You should at least read about "volatility drag."

Yes, but...… look at the long-term charts of portfolio backtest. At PORTFOLIO VISUALIZER.

Huge volatility, huge max drawdown. TQQQ lost -79% when QQQ lost -35%. But TQQQ went down from $1,792,400 to $416,391 while QQQ dropped from $98,613 to $67,337. Notice that the bottom of $416,391 (TQQQ) is higher than the top of $98,613 (QQQ).

Might be worthwhile to buy a soupçon of TQQQ and let it ride.


PV link: https://www.portfoliovisualizer.com...location2_2=100&symbol3=QLD&allocation3_3=100

 

[Out-to-Lunch]

Yes, but...… look at the long-term charts of portfolio backtest. At PORTFOLIO VISUALIZER.

Huge volatility, huge max drawdown. TQQQ lost -79% when QQQ lost -35%. But TQQQ went down from $1,792,400 to $416,391 while QQQ dropped from $98,613 to $67,337. Notice that the bottom of $416,391 (TQQQ) is higher than the top of $98,613 (QQQ).

Might be worthwhile to buy a soupçon of TQQQ and let it ride.


PV link: https://www.portfoliovisualizer.com...location2_2=100&symbol3=QLD&allocation3_3=100

I will be honest and admit that I did not know there were any 3X funds that came out ahead, let alone that far ahead.

 

[RetiredAt49]

Is SPLG a good enough ETF for S&P500?

I will be honest and admit that I did not know there were any 3X funds that came out ahead, let alone that far ahead.

Yeah many financial “experts” recommend only using 2-3x leveraged ETF’s for day trading (which I do) but I also have TQQQ and UPRO in my long term portfolio (less than 1% of my NW). TQQQ tracks QQQ and UPRO tracks S&P 500 but with 3x leverage. They have both performed very well and while there might be “volatility drag” because they “reset daily”, portfolio visualizer and my own portfolio clearly show that buying and holding long term can produce amazing returns. YMMV

 

[engineernerd]

I'm not going to touch the subject of leveraged ETFs!

Regarding stock-index ETFs versus equivalent mutual funds, ever since the "flash crash" (May 6, 2010) I have been a strong believer in ETFs because of the ability to place limit orders. Even though the flash crash was over before the end of the trading day and didn't (noticeably) affect closing prices, who's to say a future crazy event won't? So I usually use limit orders defensively, setting my limit price pretty close to the current trading price as long as that price seems OK.

In choosing between ETFs that do the same thing, such as SPLG and VOO, I look at three things: expenses/expense ratios, size of the ETF (total assets under management), and who manages the ETF.

The relevance of expenses needs no explanation, I hope.

A bigger ETF will tend to track the index more closely and will be harder for speculators to manipulate. This seems to favor VOO, though both are pretty big.

And I prefer ETFs managed by more reputable firms but also consider diversifying my exposure to ETFs from different fund families (e.g. not holding only Vanguard funds).

I am not entirely sure but I believe malfeasance by an ETF manager might be considered "investment risk" and might therefore not be covered under SIPC. I should look into that. The answer to that question is probably the same whether it's an ETF or a traditional mutual fund.

 

[NW-Bound]

Here's a short comparison of S&P ETFs:

https://www.investopedia.com/investing/top-sp-500-etfs/

https://www.msn.com/en-us/money/oth...51987208ff5ac6&ocid=winp2fptaskbarhover&ei=13

For buy-and-hold investors, these are practically interchangeable.

However, for an active investor like myself who wants to goose the return a bit by timing the market to buy/sell covered options, then SPY has way superior liquidity compared to the other ETFs. The bid/ask spreads on even the options of SPY are down to the penny. The trading volumes of both the stock and options are huge.

Of course, if you are an active investor, you know the above already.