Index Funds That Can Beat the S&P 500

Investors in S&P 500 index funds have faced discouraging times.

During the decade ending on July 31, the index produced a meager annual return of 2.91%, according to Morningstar. Plenty of stock and bond funds did better than that. Critics have piled on, claiming that the S&P has become outdated. As evidence, the doubters point to a variety of index funds that have outpaced the S&P 500 in recent years.

Can the competing indexes continue trouncing the S&P by wide margins? Not necessarily. But there are a handful of index funds that seem likely to outdo the S&P over the long term. ...