What high beta means, how a high‑beta fund and two low‑volatility funds did each year since 2017, when high beta paid and when it hurt, and how far big high‑beta stocks fell in recent selloffs.
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Historically, high‑beta stocks earned their keep in strong, steady bull markets and gave much of it back in selloffs. So the useful question is not whether to own them, but how much, and what you will do when they fall 45% or more. That makes them part of any plan for portfolio protection.
Beta measures how much a stock has moved with the market. A beta of 2 means it rose or fell about 2% for each 1% move in the S&P 500, on average. This page compares three funds built on that idea:
Each held the whole time (Jul 2016 – Sep 2026, daily closes, dividends reinvested):
| Portfolio | Return a year | Volatility | Worst fall | 2022 bear | COVID 2020 |
|---|---|---|---|---|---|
| 100% S&P 500 | 15.2% | 17.8% | −33.7% | −24.5% | −33.7% |
| High‑beta S&P 500 (SPHB) | 18.7% | 28.5% | −46.8% | −30.1% | −46.6% |
| Low‑volatility S&P 500 (SPLV) | 7.2% | 15.3% | −36.3% | −17.3% | −36.3% |
| Min‑volatility US stocks (USMV) | 9.4% | 14.4% | −33.1% | −17.8% | −33.1% |
Data through the close of Nov 2, 2026. The S&P 500 fell 1.7% over the last five trading days, and the Nasdaq‑100 fell 4.4%. The S&P 500 is 3.5% below its record close of Oct 6: a small dip from its record. It is 3.1% above its 200‑day average (+5.2% a week earlier). Its 20‑day volatility is 11.3% a year, about normal for the period since 2016.
Daily closes over the last year, through Nov 2, 2026. Green: the index above its average; red: below it.
Through Nov 2, 2026. “vs 200‑day avg.” = how far the close sits above or below its 200‑day average.
| Index fund | Last 5 days | Year to date | From its high | vs 200‑day avg. |
|---|---|---|---|---|
| S&P 500 (SPY) | −1.7% | +11.2% | −3.5% | +3.1% |
| Nasdaq‑100 (QQQ) | −4.4% | +11.2% | −10.3% | +0.2% |
| Russell 2000 (IWM) | +0.8% | +14.2% | −8.3% | +0.5% |
| Index fund | S&P 500 (SPY) | Nasdaq‑100 (QQQ) | Russell 2000 (IWM) |
|---|---|---|---|
| Last 5 days | −1.7% | −4.4% | +0.8% |
| Year to date | +11.2% | +11.2% | +14.2% |
| From its high | −3.5% | −10.3% | −8.3% |
| vs 200‑day avg. | +3.1% | +0.2% | +0.5% |
Last updated Nov 2, 2026. Members only.
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High beta won more often, and by more. SPHB beat the S&P 500 in six of ten calendar years; the two low‑volatility funds beat it in two.
| Year | S&P 500 (SPY) | High beta (SPHB) | Low volatility (SPLV) | Min volatility (USMV) |
|---|---|---|---|---|
| 2017 | +21.7% | +17.9% | +17.3% | +18.9% |
| 2018 | −4.6% | −15.5% | −0.2% | +1.3% |
| 2019 | +31.2% | +34.0% | +27.9% | +27.7% |
| 2020 | +18.3% | +25.5% | −1.4% | +5.6% |
| 2021 | +28.7% | +40.6% | +24.1% | +20.8% |
| 2022 | −18.2% | −20.6% | −4.9% | −9.4% |
| 2023 | +26.2% | +33.3% | +0.5% | +10.3% |
| 2024 | +24.9% | +8.5% | +13.9% | +15.7% |
| 2025 | +17.7% | +32.9% | +4.1% | +7.7% |
| 2026 (to Sep) | +12.1% | +29.1% | −0.4% | +3.9% |
Two years break the simple story. In 2024 the S&P 500 rose 24.9% and SPHB only 8.5%, so a rising market was not enough on its own. In 2020 SPHB fell hardest in the crash and still finished the year 7.2 points ahead of the index. Over longer histories, calmer stocks have often earned more per unit of risk than theory predicts (the low‑volatility anomaly), but that did not show up in this decade.
High beta paid in long, broad advances and hurt in fast crashes and in grinding bear markets. Calendar returns and each fund’s largest fall inside each selloff, in Exent’s data:
Market analysts describe the same pattern. In a December 2024 MoneyShow piece on Yahoo Finance, JC Parets noted that high beta tends to lead in healthy markets and lag in weak ones, and that technology was about half of SPHB against 8% of SPLV. Leveraged index funds amplify the same swings: see when it is safe to hold leveraged ETFs and risk‑on vs risk‑off positioning.
Further than the index in most selloffs, and they rebounded harder. Large US companies with high betas, against the S&P 500 and one low‑beta stock. Falls are peak to trough during each selloff; beta uses 60 monthly returns to Sep 30, 2026.
| Stock | Beta | COVID crash, 2020 | 2022 bear market | 2025 tariff selloff | 2023 return |
|---|---|---|---|---|---|
| NVIDIA (NVDA) | 2.21 | −37.6% | −61.8% | −32.7% | +239.2% |
| AMD | 2.44 | −34.3% | −61.6% | −31.9% | +127.6% |
| Micron (MU) | 2.21 | −42.5% | −49.8% | −38.0% | +72.0% |
| Tesla (TSLA) | 1.90 | −60.6% | −47.6% | −38.5% | +101.7% |
| Netflix (NFLX) | 1.61 | −22.6% | −72.2% | −18.0% | +65.1% |
| S&P 500 (SPY) | 1.00 | −34.1% | −25.4% | −19.0% | +26.2% |
| Coca‑Cola (KO) | 0.32 | −37.5% | −17.9% | −6.6% | −4.5% |
Beta is an average, not a rule. Netflix fell less than the index in the COVID crash and then lost 72.2% in 2022. Coca‑Cola, with a beta of 0.32, fell more than the S&P 500 in the COVID crash. Past swings say nothing certain about the next ones, and none of these is a recommendation.
Most approaches come down to sizing and a plan written before the fall, not after it:
They were over the last decade for investors who held through the falls: a high-beta S&P 500 fund returned 18.7% a year against 15.2% for the index from July 2016 to September 2026. The price was a 46.8% worst fall against 33.7%.
A stock that has moved more than the market. A beta of 2 means it rose or fell about 2% for each 1% move in the S&P 500, on average. NVIDIA and AMD had betas above 2 over the five years to September 2026.
High beta, in most years of the last decade. A high-beta S&P 500 fund beat the index in 6 of 10 calendar years; the low-volatility funds beat it in 2 (2018 and 2022) and returned 7.2% and 9.4% a year.
Partly. They fell less in the slower 2022 bear market and the 2025 selloff, but in the fast COVID crash the low-volatility S&P 500 fund fell 36.3%, more than the S&P 500’s 33.7%.
In selloffs and bear markets: in Exent’s data the high-beta fund lost 15.5% in 2018 and 20.6% in 2022, and fell 46.6% in the 2020 crash. It also lagged in 2024, a strong year for the index.
Market intel provides a Risk ON / Neutral / Risk OFF reading from four pillars, cross-asset analysis, an events calendar and regular written notes. Context for reviewing a plan, not a crash forecast.
Educational content, not investment advice. Examples are illustrative; past performance does not guarantee future results.