Will The SPY ETF Reach $500 By 2022

Published on

Every week, Benzinga conducts a sentiment survey to find out what traders are most excited about, interested in or thinking about as they manage and build their personal portfolios.

Get The Full Ray Dalio Series in PDF

Get the entire 10-part series on Ray Dalio in PDF. Save it to your desktop, read it on your tablet, or email to your colleagues

Q3 2020 hedge fund letters, conferences and more

We surveyed a group of over 500 investors on whether the SPY ETF (NASDAQ: SPY) will reach $500 by 2022.

What Are ETFs?

ETF stands for exchange-traded funds. An ETF is an investment fund that trades on a stock exchange along with stocks for individual companies.

ETFs track a sector, represent a commodity (like gold, oil or wheat) or sample a basket of stocks or bonds that meet a given criteria.

The SPY ETF tracks the S&P 500. Exchange-traded funds are popular with investors given they can help mitigate risk in your portfolio.

Tesla S&P Inclusion

If you’re concerned the inclusion of Tesla (NASDAQ: TSLA) into the S&P 500 could destabilize the SPY ETF as a whole, consider the EV company represents only 1.6% overall weighting for the index fund.

Our team recently reported that in a worst-case scenario in which Tesla gives up all its gains from the past two years, it would represent about 90% downside for the stock.

Do you know which under-the-radar stocks the top hedge funds and institutional investors are investing in right now? Click here to find out.

At a 1.6% overall weighting for Tesla, that 90% downside would still only translate to a 1.44% decline for the S&P 500.

SPY ETF Forecast 2021

59% of Benzinga traders and investors told us the SPY ETF would reach $500 by the end of next year.

Traders and investors who participated in our study cited SPY will see strength given the belief the US economy will significantly recover in 2021 and tech stocks will out-perform markets in 2021.

As an index fund SPY is indeed tech-dependent- roughly one-third of represented companies in SPY are in the tech sector. Respondents to our study also believe consumer discretionary spending will increase in sympathy with an improving US economy in 2021, led by tech giants Apple (NASDAQ: AAPL), Microsoft (NASDAQ: MSFT) and Amazon (NASDAQ: AMZN).

Taking a look at SPY’s weighted average by market capitalization, the 3 FAANG companies represent about 17% of the ETF’s market cap as of publishing.

See Also: Blue Chip Stocks.

This survey was conducted by Benzinga in December 2020 and included the responses of a diverse population of adults 18 or older.

Opting into the survey was completely voluntary, with no incentives offered to potential respondents. The study reflects results from over 500 adults.

Henry Khederian contributed to this report.

Signup to ValueWalk!

Get the latest posts on what's happening in the hedge fund and investing world sent straight to your inbox! 
This is information you won't get anywhere else!