How to beat the index or any ETF without actively stock picking?

I am not sure what this means, if you want to beat the index, you have to overweight the stock that you believe will win during your investment horizon (underweight the losers).

Unless you want to lever your position by borrowing to invest, leveraged etf, or call options (in which very risky)

Aside from trying to replicate the top few holdings of indexes such as S&P 500, another way to beat the index is simply buying companies screened by the Magic Formula.

The magic formula developed by Joel Greenblatt is able to screen out stocks with superb fundamentals that are unseen and undetected by majority of the market, and some are even micro-cap stocks which can x10 or x50 easily in the long run.

Can see the evidence and how it’s done by looking at the book “The little book that still beats the market”

Top holdings in ETFs are mostly Mega Cap stocks which will have limited growth potential of between 5%-20% CAGR tops and won’t have monstrous returns of 100% -200% (or more)

Like Peter Lynch said, the lesser Institutions holding, the better. Stocks that gets indexed typically gets overvalued so naturally as it gravitates to its intrinsic value in the long run, the growth won’t be spectacular.

So the goal is to find “Fast Growers” and not too many “Slow growers” which are the blue chips. Can read up more on this in book “One up on Wall Street”

Personally beat the market in 2020 following the strategies above as well as a few safe counters to tame my portfolio volatility.XIRR (Annualised) as of 31 Dec 2020 is +78.85% annualised return. (Beat S&P 500, Nasdaq-100, Total World Stock Index)

Also to all those who rejoice beating STI this year, it is pretty easy because even people that put money in their banks only also beat the STI.

STI returns for 2020 was negative so beating STI is not something to be proud of. Long run market return is 7%, as long as can maintain above 7% annualised return for the long run, you’re on track.