Tutorial: finding investments that keep beating the market

1Start with the right question

Every investment decision has a quiet alternative: you could have bought a low-cost S&P 500 index fund and done nothing. Most professional fund managers fail to beat that over long stretches, which is why the S&P 500 is the yardstick investors care about most.

So the useful question isn't "did this fund go up?" Almost everything goes up in a good market. The question is:

Did this do better than what I'd have owned by default, and did it keep doing so?

The gap between the two is the opportunity cost of a choice. A fund that returns 12% a year looks fine on its own, but if the index returned 15% over the same years, it cost you 3% a year, compounded.

Benchmark

The investment you compare against: your default alternative. SPY (an S&P 500 fund) is the usual choice, but it can be anything, including a fund you already own.

2Your first comparison

Opening BetterThanSPY runs a comparison straight away. The settings panel at the top is where you shape it:

The BetterThanSPY settings panel: benchmark search, time periods, sort order, and category filters, each marked with a number.

Benchmark. SPY is preselected. One click switches to QQQ (Nasdaq-100), VTI (total US market) or AGG (US bonds), or type any ticker.
Time periods. By default: 1 month, 6 months, year to date, 1, 3, 5 and 10 years. Each fund earns one point for every period in which it beat the benchmark, and only funds that reach a minimum score are listed.
Sort order. Most periods beaten first, with a single period (1 year by default) to break ties.
Filters. Category chips, fund size and the leveraged-fund switch narrow the field. Each chip shows how many results it holds.

That's the whole idea: one scoreboard, every US ETF, scored on how often it beat your benchmark rather than how much it won in one lucky window.

Try it: the default comparison against SPY

3Why one good year proves little

Take the 1,235 ETFs that have at least ten years of history and $100 million or more in assets. Here is how many beat SPY in each period on its own:

Period	SPY's total return	ETFs that beat it
1 month	−0.1%	438
6 months	+10.4%	209
Year to date	+14.0%	367
1 year	+16.4%	444
3 years	+90.7%	253
5 years	+82.2%	230
10 years	+323.1%	105

Out of 1,235 ETFs with 10+ years of history and $100M+ in assets.

Hundreds of funds beat SPY in any single window. Now ask for more than one window at a time:

At least 1 of 7796

At least 2488

At least 3351

At least 4217

At least 5123

At least 663

All 78

Same 1,235 ETFs. Each step up removes roughly half of the field.

The drop-off is steep. Of the 444 funds that beat SPY over the last year, only 181 also beat it over five years, and just 68 over ten. Last year's winner is more often than not a long-run laggard.

Why consistency is so hard

Luck is plentiful. With over a thousand funds, many will beat the index in any given year by pure chance, the same way a few people in a crowd will call ten coin flips in a row.
Markets rotate. Energy, tech, small caps, Japan, gold: each takes turns leading. A fund built on one theme rides its cycle up and then back down.
Costs compound. A fund that charges 0.75% a year has to outperform by that much every year just to break even with a 0.03% index fund.
The window flatters. Any fund can look brilliant if you choose the right start and end dates. Checking many windows at once takes that choice away.

Who scored 7 out of 7?

The eight funds that beat SPY in every period make the point well:

VOO, IVV and SPYM hold the very same S&P 500 stocks as SPY. They "beat" it only because they charge less (about 0.02–0.03% a year against SPY's 0.09%). That small gap, compounded, is enough to win every period.
UDOW is a 3× leveraged Dow fund: a bet on daily moves, not a long-term holding (more on that in section 7).
BNO, CRAK, DXJ and CIBR are focused bets on oil, oil refiners, Japanese stocks and cybersecurity, each of which happened to lead in all of these windows.

BetterThanSPY results requiring all 7 periods: 8 ETFs beat SPY, led by BNO, CRAK and DXJ, each scoring 7 out of 7. — With the minimum set to 7 of 7, the list shrinks to a handful. Every cell is green.

Key takeaways

A high score is a reason to look closer, not a verdict. Always ask why a fund won.
Beating the benchmark in many periods, short and long, is much stronger evidence than a big win in one.
Sometimes the best "outperformer" is simply a cheaper version of what you already own.

Try it: funds that beat SPY in all 7 periods

4Reading a result

The benchmark sits at the top in blue, so you can always see the returns to beat. Below it, each result is one card, read left to right:

The SPY benchmark row above a result card for BNO, with the ticker, score, period cells and chart marked 1 to 4.

1Ticker and name: Plus the fund's category, issuer, fee and size, and quick links to Yahoo Finance and Google Finance.
2Score: For example 7/7: the number of periods it beat the benchmark in. The small squares underneath show which ones, in order.
3Period cells: The fund's total return in each period, green where it beat the benchmark and red where it trailed. The small multiple (like 1.4×) compares the two returns: 1.4× means the fund returned 1.4 times what the benchmark did, say 21% against 15%. The outlined cell is the one used to break ties.
4Chart: The fund (green) against the benchmark (dotted) over the chart period you pick.

Hover over (or tap) any cell for a side-by-side chart and what $10,000 would have become in each:

Hovering BNO's 1-year cell shows a chart of BNO against SPY: $10,000 became $24,006 versus $11,641 in SPY. — BNO's 1-year cell: $10,000 became $24,006, against $11,641 in SPY.

A gray cell means the fund is too new for that period; it counts neither for nor against it.

5Choosing periods

Mix short and long periods. Short ones (1 to 6 months) show what's working now, which is mostly momentum and theme. Long ones (5 to 10 years and beyond) show whether a strategy survives full market cycles. A fund that scores well across both is rare and worth a closer look.

Long-term investing: lean on 3, 5, 10 years and longer. Treat 1 month as noise.
Checking a recent trend: 1, 3 and 6 months plus 1 year, but remember the luck problem above.
Overlap: 3, 5 and 10 years share their most recent years, so a single great recent stretch can lift all three. Including a short period helps reveal that.

The minimum score slider sits inside the period picker. By default it adjusts itself: it starts at about three quarters of your periods and rises until fewer than 100 results remain, so you always get a list short enough to study. Move it yourself whenever you want to be stricter or looser.

The open period picker: a grid of periods from 1 day to 40 years, with the minimum beat count slider set to 6 of 7 periods. — Click a period to add or remove it. The slider below sets how many periods a fund must beat.

Try it: only long periods, all four required

6Picking a fair benchmark

A comparison is only as good as its benchmark. The same five years tell very different stories depending on what you compare against:

Benchmark	Its 5-year return	ETFs ($100M+) that beat it
QQQ · Nasdaq-100	+98.1%	191
SPY · S&P 500	+82.2%	320
VTI · total US market	+73.1%	438
AGG · US bonds	−1.3%	1,605

Beating AGG during a stock rally says little: you're comparing stocks to bonds. Match the benchmark to the decision you're making:

Choosing a US stock fund? SPY or VTI.
Choosing a tech or growth fund? QQQ is the bar to clear.
Choosing a bond fund? AGG.
Wondering about something you own? Make it the benchmark. The results become "everything that did better than my fund".

Results with QQQ as the benchmark: QQQ's returns sit in the blue row on top, with RSPT beating it in 7 of 7 periods below. — With QQQ as the benchmark, its returns become the bar every card is measured against.

Try it: what beat QQQ?

7Filters that protect you

Leveraged and inverse funds

These funds aim to deliver 2× or 3× (or the opposite) of an index's daily move. Over a day that works; over months, the daily resets make returns drift away from the index, usually downward in choppy markets. They dominate short-term leaderboards: 45 of the 50 best-performing ETFs over the last month were leveraged. Of the 183 leveraged funds with five years of history, 88 beat SPY last month, but only 40 did over five years.

If you're investing for the long run, switch off Include leveraged & inverse. The switch sits with the other filters, below the benchmark and periods:

Try it: the default comparison without leveraged funds

Fund size

Small funds are more likely to close, can cost more to trade, and their short track records are easier to flatter. Of the 1,036 non-leveraged ETFs that beat SPY over the last year, 271 had under $100 million in assets. The default size filter ($100M+) keeps them out; lower it if you want to dig deeper.

Fees

Every card shows the expense ratio. Returns here are already after fees, but fees are the one part of future returns you know for certain, so between two similar funds the cheaper one starts ahead.

8Beyond return: risk and reward

Two funds with the same return can be very different to own. One climbs steadily; the other swings wildly and falls 30% along the way. Most people sell during those falls, so the ride matters as much as the destination.

Here is how a few well-known funds compared with SPY over the last year:

1 year	Return	Volatility	Sharpe	Max drawdown	SPY corr	ATH trend
SPY · S&P 500	+16.4%	12.7%	1.27	−8.9%	1.00	0.31
QQQ · Nasdaq-100	+19.2%	19.9%	0.99	−12.0%	0.93	0.16
AVLV · US large-cap value	+30.6%	11.8%	2.32	−6.4%	0.81	0.56
USMV · US minimum volatility	+9.7%	8.6%	1.12	−6.5%	0.50	0.60
GLD · gold	+0.5%	28.4%	0.16	−26.4%	0.35	0.26
AGG · US bonds	−2.0%	4.0%	−0.49	−4.6%	0.44	−0.06

Green: better than SPY on that metric. Red: worse. For volatility, drawdown and correlation, lower is better.

QQQ beat SPY on return, but with far bigger swings, so per unit of risk it did worse. AVLV beat SPY on every measure. USMV gave up return in exchange for a much calmer ride, which is exactly what it's designed to do.

The six metrics, in plain words

Return: Total return over the period, with dividends reinvested. This is why numbers here can differ from a price chart: Yahoo's 1-year chart showed AVLV up 28.97% on price alone, while its total return with four dividends reinvested was 30.6%. Higher is better.
Volatility: How much the price swings, annualized. SPY's 12.7% means about two years in three land within roughly 13 points of its average return. Lower is better.
Sharpe ratio: Return earned per unit of volatility: the "was it worth the ride?" number. Above 1 is good; above 2 is exceptional and rarely lasts. Higher is better.
Max drawdown: The largest fall from a peak to a later low within the period. It's the loss you'd have had to sit through. A smaller fall is better.
SPY correlation: How closely daily moves track the S&P 500, from −1 to 1. Low correlation means real diversification: it may zig when SPY zags. It's always measured against SPY. Nearly everything is below SPY's own 1.00, so treat it as a description of a fund rather than a hurdle to beat. Lower diversifies more.
ATH trend: How often a fund set new all-time highs versus new lows during the period, with recent days weighted more, from −1 to +1. It captures a steady upward grind that a single return number can hide. Higher is better.

Asking for more than return

BetterThanSPY's Single-Period Multi-Metric tab Pro puts all six side by side for one period and lets you choose which ones a fund must beat. Pick the period, then tick the metrics under Must beat SPY on:

The Single-Period Multi-Metric tab with a 1-year period, and Return, Volatility and Max drawdown ticked as metrics that must beat SPY.

Every metric still shows in the table; the ticked columns carry a check mark, and green cells mark where a fund did better than SPY:

The metrics table: SPY's six metrics on top, followed by funds such as IALT, BAPR and SCHD that beat SPY on all six over one year.

Hover over a score for the full breakdown, metric by metric:

The score tooltip for IALT: better than SPY on 6 of 6 metrics, listing each value next to SPY's.

Over the last year, among ETFs with $100M+:

Higher return812

… and lower volatility159

… and a smaller drawdown142

Out of 2,796 ETFs with $100M+ in assets.

Four out of five funds that beat SPY's return did it by taking more risk. Asking for a higher return and a smoother ride cuts the list to the funds that genuinely did better, not just bolder.

Try it: higher return, lower volatility and a smaller drawdown than SPY

9Putting it to work

Check a fund you own

Make your fund the benchmark. If dozens of similar funds beat it across most periods, it's worth asking why you hold it.

Try it with SCHD

Find a cheaper twin

Use a popular fund as the benchmark and look for near-identical funds that beat it in every period. Often the difference is just the fee.

Try it against SPY

Look for long-run compounders

Long periods only, all required, leveraged funds off. What's left has outlasted the index through full cycles.

Try it

Find a calmer ride

Ask for a lower volatility and a smaller drawdown than SPY over the last year, without giving up return.