Two Income ETFs Outperforming the S&P 500 This Year

"I'm generally not a fan of chasing returns, whether they be in individual stocks or in mutual funds or exchange traded funds (ETFs). However, I also know that investors look for above-market returns, and want to at least check out the funds that outperformed broader indexes to see what companies these funds are invested in, and why there's some sort of outperformance differential."

"Shares of TGLR are up more than 20% at the time of writing, providing investors with a spread of around 6% over and above the performance of the benchmark S&P 500 index. What's impressive about this performance is the fact that the Laffer Tengler Equity Income ETF is concentrated on large-cap U.S. stocks. Given the high concentration of mega-cap stocks within the S&P 500 (indices are typically weighted by market capitalization), one might expect to see much more consistent performance."

Investors often avoid chasing returns but still examine funds that outperform broader indexes to identify the companies and factors driving outperformance. The S&P 500 returned about 14.5% year-to-date through Sept. 30. Three income-focused ETFs managed to beat that benchmark. The Laffer Tengler Equity Income ETF (TGLR) rose more than 20% year-to-date, roughly 6 percentage points above the S&P 500. TGLR concentrates on large-cap U.S. stocks and exhibits a pronounced size and quality tilt. The fund retains high correlation with the S&P 500, yet its specific size and quality exposure can cause periods of outperformance or underperformance depending on the market cycle.

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