Large caps are one of the most popular ways to invest in the market. These companies have the deepest pockets, and their businesses are more resilient than typical small caps. So, large caps are the best way to invest, and the Bellwether Standard & Poor’s 500 Index offers an average annual revenue over time. If you don’t want to spend the hassle of investing in individual stocks, you can be exposed to large caps via ETFs.
What is a large cap ETF?
Large ETFs are funds traded on exchanges investing in the largest companies in the market, with all companies having a total shares of over $20 billion. Large cap ETFs are a great way to analyse individual companies and own some of the most successful companies in the world without having to do the task of selecting winners.
Large caps range from several under-radar picks to common names that everyone knows, such as Amazon, Apple, Microsoft and more. Therefore, the largest companies may be 100 times more valuable than the smallest companies. Large ETFs are usually the most concentrated in large companies, with small and medium-sized businesses allocating a large number of Tinyer stocks.
Large companies tend to be popular with investors for several reasons.
- The best business in the world: Large Cap is some of the best businesses in the world and has the strongest competitive advantages in the world.
- Deep Finance: As a result of their strong business, large caps usually have access to their own cash and often allow them to raise funds on favorable terms.
- Cash Cow: In contrast to small caps, large caps tend to grow faster, but they tend to be cash cows, often returning much of their revenue to shareholders through dividends.
- Reduced volatility: Certainly, stocks tend to fluctuate a lot, but large caps tend to be less volatile than their small cousins, which makes them a little better for risk aversion investors.
One of the most famous collections of large caps is the Standard & Poor’s 500 index, which includes around 500 largest companies in the United States. The S&P 500 is an important index as it includes the most thriving American companies trading on exchanges.
These are great benefits for investors, but if you have little knowledge about investments or simply don’t want to manage your own investments, the best place to start is to buy a large ETF.
Top performance large cap ETF
Bankrate selected these top funds based on the following criteria:
- US funds featured in large caps on ETF.com screeners
- Funding among top performers over the past five years
- Performance measured on May 30, 2025 using the latest numbers
- Expense rate below 0.5%
- No reverse or leveraged ETFs
Investco S&P 500 Momentum ETF (SPMO)
The fund tracks the S&P 500 Momentum Index. This includes stocks in the S&P 500, which gives you a higher score on Momentum. The fund is restructured every six months.
- 2025 YTD Performance: 10.6%
- Historic Performance (5+ Years): 21.3%
- Cost Ratio: 0.13%
Investco S&P 500 High Beta ETF (SPHB)
This ETF tracks the S&P 500 high beta index. This includes the largest beta version of the top 100 S&P 500 shares, or price sensitivity to market movements.
- 2025 YTD Performance: 0.2%
- Historic Performance (5+ Years): 19.1%
- Cost Ratio: 0.25%
ISHARES Russell Top 200 GrowthETF (IWY)
The fund tracks Russell’s Top 200 Growth Index, including the largest US companies expected to grow at a more trendy pace.
- 2025 YTD Performance: -1.4%
- Historic Performance (5+ Years): 18.8%
- Cost Ratio: 0.20%
Motley Fool 100 Index ETF (TMFC)
The index fund either invests in the largest and most liquid stocks of the top 100 that Motley Fool actively recommends, or ranks in the top 150 of its analysts.
- 2025 YTD Performance: 1.6%
- Historic Performance (5+ Years): 18.5%
- Cost Ratio: 0.50%
Schwab US Large-Cap GrowthETF (SCHG)
The ETF tracks Dow Jones US’s large-scale total growth stock market index, including large, growing American companies.
- 2025 YTD performance: -1.2%
- Historic Performance (5+ Years): 18.4%
- Cost Ratio: 0.04%
Investco QQQ Trust (QQQ)
This ETF tracks Nasdaq 100 indexes. This is a collection of 100 largest companies traded on Nasdaq.
- 2025 YTD performance: 1.7%
- Historic Performance (5+ Years): 18.4%
- Cost Ratio: 0.20%
Pacer US Cash Cows100ETF (Cowz)
The fund includes a collection of large-cap stocks, the top 100 companies on the Russell 1000 Index, weighting them by free cash flow yields. Weighting is limited to 2%, and the index is reconstructed quarterly.
- 2025 YTD Performance: -4.4%
- Historic Performance (5+ Years): 17.6%
- Cost Ratio: 0.49%
Are large ETFs a good investment?
Large cap ETFs are a great place for beginners, but they can also be a great option for senior investors. Large ETFs can earn attractive long-term returns.
Larger stock portfolios such as the S&P 500 generate around 10% annual returns over the long term, but returns are much more strange than that. A great year for the market is 30% return, but sometimes the market can also drop significantly in one year. So, if you want to get the level of returns that a large cap offers, it’s essential to buy and hold it.
As mentioned above, the large cap consists of the largest and most financially stable companies in the market. Its stats tend to fluctuate slightly more than small caps, even the best small caps. But during a tough year, it may seem like cold comfort. Because they can still drop significantly. Another advantage: Large caps tend to pay more dividends than their smaller rivals.
If you are looking for growth and stability, you can split the differences between large caps and small caps by focusing on the best MID-CAP ETFs.
Conclusion
Large ETFs are the best way to invest in the stock market regardless of skill level, and help investors buy that segment of the market without extensive research into their investments. But like any type of investment, if those risks tend to be lower than other types of stocks, such as small and intermediate stocks, it doesn’t come without risk.
Editorial Disclaimer: All investors are advised to conduct their own independent research into investment strategies before making an investment decision. Furthermore, investors recommend that past investment products performance is not a guarantee of future price increases.