Publication Date

Spring 2025

School

School of Business

Major

Business Administration

Keywords

Mutual Funds, Exchange-Traded Funds (ETFs), Sector Investing, S&P 500, SPDR Sector Funds, Market Capitalization, Top Five Strategy, Diversification, Passive vs Active Investing, Fund Performance, Portfolio Construction, Investment Strategy, Fund Administration, ETF Launch, Mutual Fund Launch, Index Funds, Asset Allocation, Growth of a Dollar

Disciplines

Business

Abstract

Humans have a fascination with investing. The thought of growing our investment account can be such a significant part of our lives, leaving many to the ruins of failed investment strategies. The speaker is unknown, but a great quote is, “Picking individual stocks is like trying to find a needle in a haystack, and often the haystack is on fire.” History tells us that picking stocks can be a loser's game, and there is a more thoughtful way to go about this journey. The common-themed answer resides in putting one’s money into mutual funds and ETFs. John Boggle, the founder of Vanguard, stated, “The beauty of investing in mutual funds is that they are designed for investors who do not have the time, expertise, or resources to buy individual stocks.” The majority of people fall into this category, which is why these funds have become the top recommendation for long-term financial success and achieving financial freedom. The thesis of this research paper is to discover the positives of investing in mutual funds and ETFs over picking stocks. Furthermore, analyzing a strategy where sector-based investing focuses on the top five market-cap stocks from each of the 11 S&P 500 sectors, followed by the process of starting a mutual fund or ETF with this strategy.

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