Bet on growth ETFs to profit from the optimism of US economic growth

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The current optimism in the US economy is peppered with many positive factors that may continue to fuel investor optimism. Factors such as a better-than-expected third-quarter earnings season, improving labor market conditions, rising consumer confidence and the passage of the long-awaited $ 1.2 trillion infrastructure bill. dollars sparked a rally on Wall Street. In addition, the coronavirus outbreak appears to be gradually being brought under control, as new cases of the highly infectious Delta variant have been declining since early September.

In particular, investors looking to take advantage of impressive trends should consider growth ETFs. However, it should be noted that these funds provide exposure to stocks with growth characteristics that have comparatively higher P / B, P / S and P / E ratios and have a higher degree of volatility compared to stocks. valuable. Investors may consider certain ETFs as Invesco Aggressive Large Cap Growth ETF (PWB), SPDR S&P 500 Growth ETF Portfolio (SPYG), IShares S&P 500 Growth ETF (IVW), ETF Schwab US Large Cap Growth (SCHG) and Vanguard S&P 500 Growth ETF (VOOG).

The three major US stock exchanges are close to their all-time highs. The Dow Jones Industrial Average is around 1.3% of its all-time high. The S&P 500 is at 0.8% and the Nasdaq Composite is at 1.2% from reaching its all-time highs.

The impressive third quarter results kept investors busy. The earnings results also allayed investor concerns over growing supply chain disruptions that are eroding corporate profit margins. The market rally was also driven by the much anticipated announcements from the Federal Reserve. The central bank has signaled its intention to initiate the reduction in bond purchases “later this month” (according to a CNBC article).

Another positive development, the US employment report for November looks very impressive. Non-farm payrolls increased by 531,000 in October, topping the estimate of 450,000, according to a CNBC article. Moreover, beating expectations, the unemployment rate fell to 4.6%, reaching a new pandemic level (according to a CNBC article).

Wall Street has another reason to rejoice as the US House of Representatives passed the $ 1 trillion infrastructure bill on November 5. The bill has now been forwarded to President Biden for his signature. The legislation was approved by a vote of 228-206.

Continuing, consumer confidence in the United States rose in October mainly as concerns about the Delta variant eased, labor market conditions improved, the US economy rebounded from the crisis. due to the pandemic and the acceleration of the deployment of the coronavirus vaccine. The Conference Board’s consumer confidence index stood at 113.8 against 109.8 in September.

The metric finally broke the streak of three straight monthly declines. The October reading also broke the metric’s consensus estimate, at 108.3, according to a Reuters poll. The measurement continues to be below the pre-pandemic level of 132.6 in February 2020.

Consumers appear to be looking to purchase durable homes, motor vehicles and household capital goods. In fact, the buying attitude for vehicles and homes is booming. The survey also showed that the proportion of the population planning to go on vacation reached its highest level since February 2020, as mentioned in a Reuters article.

Continuing, the Atlanta Fed said the U.S. economy will grow 8.2% in the fourth quarter of 2021 in its latest forecast on Nov. 10. This signals an improvement from the previous 6.6% expectation of October 29.

As the holiday season approaches, with national and international borders reopening for travel, we are excited about the economic growth of the United States. The United States has largely eased travel restrictions and is reopening to fully vaccinated international travelers. The news has boosted enthusiasm for the economic recovery and travel. In fact, airlines recently hinted at a strong travel trend.

Growth ETFs to consider

Below we have discussed in detail a few growth ETFs that could be added to the portfolio:

Invesco Aggressive Large Cap Growth ETF PTB

PWB is based on the Dynamic Large Cap Growth Intellidex Index. Style Intellidex applies a rigorous 10-factor style isolation process to objectively separate companies into their appropriate investment style and size universe.

The Invesco Dynamic Large Cap Growth ETF has assets under management of $ 837 million and charges an expense ratio of 0.56%. PWB carries a Zacks ETF Rank # 2 (Buy), with a medium risk outlook. In addition, the Invesco Dynamic Large Cap Growth ETF trades on three-month average volumes of around 30,000 shares (read: ETF Strategies to Encourage Market Dynamics in October).

SPDR S&P 500 Growth ETF Portfolio SPY

SPYG seeks to provide investment results which, before fees and expenses, generally correspond to the total return of the S&P 500 Growth Index. The index contains stocks that exhibit the strongest growth characteristics based on the growth in sales, change in profit / price ratio and momentum.

SPDR Portfolio S&P 500 Growth ETF has assets under management of $ 15.05 billion and charges an expense ratio of 0.04%. SPYG carries a Zacks ETF Rank # 2, with a medium risk outlook. In addition, SPDR Portfolio S&P 500 Growth ETF trades in three-month average volumes of around 2.3 million shares (read: ETF strategies to take advantage of market optimism in November).

IShares S&P 500 Growth ETF IVW

IVW provides exposure to large US companies whose earnings are expected to grow at an above-average rate relative to the market and tracks the S&P 500 Growth Index.

iShares S&P 500 Growth ETF has an AUM of $ 38.89 billion and charges an expense ratio of 0.18%. IVW carries a Zacks ETF Rank # 2, with a medium risk outlook. In addition, the iShares S&P 500 Growth ETF trades at three-month average volumes of approximately 1.8 million shares.

ETF Schwab US Large Cap Growth SCHG

SCHG’s objective is to track as closely as possible, before fees and expenses, the total return of the Dow Jones US Large-Cap Growth Total Stock Market index.

The Schwab US Large-Cap Growth ETF has AUM of $ 17.32 billion and charges an expense ratio of 0.04%. SCHG carries a Zacks ETF Rank # 2, with a medium risk outlook. In addition, the Schwab US Large-Cap Growth ETF trades at three-month average volumes of approximately 345,000 shares.

Vanguard S&P 500 Growth ETF VOOG

VOOG seeks to track the performance of the S&P 500 Growth Index.

The Vanguard S&P 500 Growth ETF has AUM of $ 7.36 billion and charges an expense ratio of 0.10%. VOOG carries a Zacks ETF Rank # 2, with a medium risk outlook. In addition, Vanguard S&P 500 Growth ETF trades in three-month average volumes of approximately 107,000 shares.

Boom in infrastructure stocks will sweep America

A massive push to rebuild crumbling American infrastructure will soon be underway. It is bipartisan, urgent and inevitable. Billions will be spent. Fortunes will be made.

The only question is, “Are you going to jump into good stocks early when they have the greatest potential for growth?” “

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Invesco Dynamic Large Cap Growth (PWB) ETF: ETF Research Reports

ETF Schwab US LargeCap Growth (SCHG): ETF Research Reports

IShares S&P 500 Growth ETF (IVW): ETF Research Reports

SPDR S&P 500 Growth ETF (SPYG) Portfolio: ETF Research Reports

Vanguard S&P 500 Growth ETF (VOOG): ETF Research Reports

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


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