I’m sure you’ve heard that you can’t beat the market. It’s the prevailing wisdom—and it’s why passive index funds are more popular than ever.
But by that logic, picking stocks is pointless. And actively managed funds? You’ll find no joy there, either, because most managers underperform … and charge you outrageous fees for doing so.
That pretty much leaves us with one option: stick all our cash in a low-fee passive fund like the Vanguard Total Stock Market ETF (VTI) and call it a day, right?
The truth is, there are literally hundreds of funds out there that have been outperforming the market for a long time. Today, I’m going to show you five of them.
And before you ask, no, they aren’t all from one sector.
Two are in healthcare and pharmaceuticals: Tekla Life Sciences Investors (HQL) and Tekla Healthcare Investors (HQH), while the John Hancock Financial Opportunities Fund (BTO), as the name implies, is in financials.
Taken together, these funds give you exposure to different asset classes, different sectors and different management teams.
The Power of Income
These five funds aren’t just outperforming the S&P 500; they’re also throwing off huge dividends. In fact, you can get an average payout of 9.3% by combining all five into a single portfolio.
How is this possible? Let’s take a look…