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Join the Stupendous Wall Street Rally With These ETFs
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Investors are having a great time with the major indexes scaling to record highs and delivering impressive rallies. After having touched a key milestone of 36,000 for the first time on Nov 1, the Dow Jones industrial Average has been rallying above the record mark. The blue-chip index closed at a new record of 36,157.58 on Nov 3 and has registered its 51st record intraday high of 2021 along with hitting the 42nd record close of this year, per a CNBC article.
The other two broader indices, the S&P 500 index and the Nasdaq Composite, have also been closing at record highs. In fact, all the three major averages closed at a record for the fourth trading session in a row on Nov 3.
The small-cap centric index, the Russell 2000, also closed at an all-time high level by gaining 1.8% on Nov 3. The index is already up 4.7% this week.
The upside in the market has been driven by the much-anticipated announcements from the Federal Reserve. The central bank has informed about its plan to initiate the tapering of bond purchases “later this month” (according to a CNBC article). The central bank will roll back the month-end bond purchases by cutting $10 billion of $80 billion a month in Treasuries and $5 billion from $40 billion a month in mortgage-backed securities (per a CNBC article). If everything goes well, the Federal Reserve expects to finish off tapering by mid-2022.
In this regard, George Ball, chairman of Sanders Morris Harris, has said that “The Fed’s tapering announcement removes a minor, but overhanging worry across markets, as investors had been waiting for this moment for months, and it reinforces the view that the economic recovery has a long runway, albeit with a low rate of growth,” as mentioned in a CNBC article.
Market pundits are also crediting the stupendous rally to the impressive earnings season. Notably, 80.9% of the S&P 500 companies that reported earnings results have surpassed analysts’ earnings estimates as of Nov 3, per the FactSet data (per a CNBC article). The earnings results have also erased investors’ worries stemming from the rising supply-chain disturbances, gradually eroding the corporate profit margins.
ETFs to Ride the Wave
Investors who seek to capitalize on the strong trends should consider the following ETFs:
This fund seeks to provide investment results that before expenses generally correspond to the price and the yield performance of the S&P 500 Index. Its total expense ratio is 0.09% (read: Best Leveraged ETF Areas of Past Decade).
SPDR Dow Jones Industrial Average ETF Trust (DIA - Free Report)
The fund seeks to provide investment results that before expenses generally correspond to the price and the yield performance of the Dow Jones Industrial Average. It charges an expense ratio of 0.16% (read: ETFs to Tap as Dow Jones Hits 36K for the First Time).
This fund provides exposure to large and mid-cap stocks that exhibit relatively higher price momentum by tracking the MSCI USA Momentum SR Variant Index. It charges 15 basis points (bps) in fees per year (read: ETF Strategies to Cheer the Market Momentum in October).
This fund tracks the Dorsey Wright Technical Leaders Index, which measures the performance of companies that demonstrate powerful relative strength characteristics. It charges 62 bps in annual fees (read: High Momentum ETFs to Buy on Wall Street's Winning Streak).
This ETF provides exposure to largest domestic and international non-financial companies listed on the Nasdaq by tracking the Nasdaq-100 Index. QQQ charges investors 20 bps in annual fees.
This fund tracks the Russell 2000 Growth Index and offers exposure to small-cap companies that have earnings growth expectations above the average rate relative to the market. The product charges 24 bps in annual fees and expenses.
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Join the Stupendous Wall Street Rally With These ETFs
Investors are having a great time with the major indexes scaling to record highs and delivering impressive rallies. After having touched a key milestone of 36,000 for the first time on Nov 1, the Dow Jones industrial Average has been rallying above the record mark. The blue-chip index closed at a new record of 36,157.58 on Nov 3 and has registered its 51st record intraday high of 2021 along with hitting the 42nd record close of this year, per a CNBC article.
The other two broader indices, the S&P 500 index and the Nasdaq Composite, have also been closing at record highs. In fact, all the three major averages closed at a record for the fourth trading session in a row on Nov 3.
The small-cap centric index, the Russell 2000, also closed at an all-time high level by gaining 1.8% on Nov 3. The index is already up 4.7% this week.
The upside in the market has been driven by the much-anticipated announcements from the Federal Reserve. The central bank has informed about its plan to initiate the tapering of bond purchases “later this month” (according to a CNBC article). The central bank will roll back the month-end bond purchases by cutting $10 billion of $80 billion a month in Treasuries and $5 billion from $40 billion a month in mortgage-backed securities (per a CNBC article). If everything goes well, the Federal Reserve expects to finish off tapering by mid-2022.
In this regard, George Ball, chairman of Sanders Morris Harris, has said that “The Fed’s tapering announcement removes a minor, but overhanging worry across markets, as investors had been waiting for this moment for months, and it reinforces the view that the economic recovery has a long runway, albeit with a low rate of growth,” as mentioned in a CNBC article.
Market pundits are also crediting the stupendous rally to the impressive earnings season. Notably, 80.9% of the S&P 500 companies that reported earnings results have surpassed analysts’ earnings estimates as of Nov 3, per the FactSet data (per a CNBC article). The earnings results have also erased investors’ worries stemming from the rising supply-chain disturbances, gradually eroding the corporate profit margins.
ETFs to Ride the Wave
Investors who seek to capitalize on the strong trends should consider the following ETFs:
SPDR S&P 500 ETF Trust (SPY - Free Report)
This fund seeks to provide investment results that before expenses generally correspond to the price and the yield performance of the S&P 500 Index. Its total expense ratio is 0.09% (read: Best Leveraged ETF Areas of Past Decade).
iShares Core S&P 500 ETF (IVV - Free Report)
The fund seeks to track the investment results of an index composed of large-capitalization U.S. equities. Its total expense ratio is 0.03% ( read: Financial ETFs at a 52-Week High: Further Rally Looks Likely).
SPDR Dow Jones Industrial Average ETF Trust (DIA - Free Report)
The fund seeks to provide investment results that before expenses generally correspond to the price and the yield performance of the Dow Jones Industrial Average. It charges an expense ratio of 0.16% (read: ETFs to Tap as Dow Jones Hits 36K for the First Time).
iShares Dow Jones U.S. ETF (IYY - Free Report)
The fund seeks to track the investment results of a broad-based index composed of U.S. equities. It charges total expense ratio of 0.20% (read: What Awaits Dow Jones ETFs Ahead of Big Earnings Releases?).
iShares MSCI USA Momentum Factor ETF (MTUM - Free Report)
This fund provides exposure to large and mid-cap stocks that exhibit relatively higher price momentum by tracking the MSCI USA Momentum SR Variant Index. It charges 15 basis points (bps) in fees per year (read: ETF Strategies to Cheer the Market Momentum in October).
Invesco DWA Momentum ETF (PDP - Free Report)
This fund tracks the Dorsey Wright Technical Leaders Index, which measures the performance of companies that demonstrate powerful relative strength characteristics. It charges 62 bps in annual fees (read: High Momentum ETFs to Buy on Wall Street's Winning Streak).
Invesco QQQ (QQQ - Free Report)
This ETF provides exposure to largest domestic and international non-financial companies listed on the Nasdaq by tracking the Nasdaq-100 Index. QQQ charges investors 20 bps in annual fees.
Fidelity Nasdaq Composite Index ETF (ONEQ - Free Report)
This ETF tracks the Nasdaq Composite Index. The expense ratio comes in at 0.21% (read: Guide to the Nasdaq ETF Investing).
Vanguard Small-Cap Growth ETF (VBK - Free Report)
This fund follows the CRSP US Small Cap Growth Index. The product charges 7 bps in annual fees and expenses.
iShares Russell 2000 Growth ETF (IWO - Free Report)
This fund tracks the Russell 2000 Growth Index and offers exposure to small-cap companies that have earnings growth expectations above the average rate relative to the market. The product charges 24 bps in annual fees and expenses.