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3 Top Ranked Large-Cap Growth ETFs for Your Portfolio
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U.S. equities have been rallying lately on strong global growth and rising investor optimism. Moreover, impressive profits for companies, as the earnings season is underway, have also contributed to the gains.
Market Movers
The U.S. economy registered strong growth of 3.1% in the second quarter. Although the markets still expect a rate hike in December, the latest Fed minutes have done little to assure investors of one. The argument over whether another rate hike can be supported amid still-low inflation continues, with policymakers unable to reach a consensus. However, the broad consensus is in favor of a rate hike in December and the major bourses scaled new intraday highs on Oct 11.
Moreover, energy stocks contributed to the rally, as Brent and WTI prices increased on the back of Saudi Arabia’s claims of reducing exports in order to curb the global supply glut. Investors are also optimistic about the likely successor of Janet Yellen, Kevin Warsh, as they see him as a market-friendly candidate who shares the administration’s aims on rate hikes and deregulation.
Risks Involved
Although advancement in the Republican tax reform led to initial gains in the markets, renewed doubts over President Donald Trump’s ability to pass the promised legislation weighed on investor sentiment. This was primarily driven by the fact that the International Monetary Fund reduced the U.S. economy’s growth forecast owing to lack of confidence in Trump’s ability to pass the tax reform.
Trump has been quite vocal about how markets have gained since the November elections. However, renewed uncertainty weighed on financials shares.
Moreover, geopolitical risks weigh on the markets. Per the latest report by a Russian news agency, the RIA, a Russian lawmaker’s recent visit to Pyongyang has revealed that North Koreans are prepping another long-range missile test. This missile can supposedly reach the west coast of the United States (read: Currency ETFs Amid Renewed Geopolitical Uncertainty).
Owing to large-cap companies’ high international exposure, strong global growth is expected to be a benefit for these companies. Moreover, owing to the high uncertainty in the markets, we believe it is best to opt for low volatility. Hence, we will now discuss a few ETFs focused on providing exposure to the large-cap growth space.
This fund is a popular ETF that maintains a hefty exposure to U.S. tech companies and tracks the Nasdaq 100 index (read: 4 Bargain ETFs in a Pricey Market).
It has AUM of $53.3 billion and charges a fee of 20 basis points a year. From a sector look, the fund has high exposures to Information Technology, Consumer Discretionary and Health Care with 59.5%, 21.2% and 11.4% allocation, respectively (as of Oct 10, 2017). The fund’s top three holdings are Apple Inc (AAPL - Free Report) , Microsoft Corporation (MSFT - Free Report) and Amazon.com Inc (AMZN - Free Report) with 11.6%, 8.5% and 6.8% allocation, respectively (as of Oct 10, 2017). The fund has returned 25.0% in a year and 25.0% year to date (as of Oct 11, 2017). It currently has a Zacks ETF Rank #2 (Buy) with a Medium risk outlook.
This fund is a popular ETF targeting large-cap U.S. companies and tracks the Russell 1000 Growth Index.
It has AUM of $37.9 billion and charges a fee of 20 basis points a year. From a sector look, the fund has high exposures to Information Technology, Consumer Discretionary and Health Care with 37.7%, 17.7% and 13.7% allocation, respectively (as of Oct 10, 2017). The fund’s top three holdings are Apple Inc, Microsoft Corporation and Facebook Inc with 6.7%, 4.7% and 3.3% allocation, respectively (as of Oct 10, 2017). The fund has returned 22.8% in a year and 22.0% year to date (as of Oct 11, 2017). It currently has a Zacks ETF Rank #1 (Strong Buy) with a Medium risk outlook.
This fund is a popular ETF targeting large-cap U.S. companies and tracks the MSCI US Prime Market Growth Index.
It has AUM of $29.7 billion and charges a fee of 6 basis points a year. From a sector look, the fund has high exposures to Information Technology, Consumer Discretionary and Health Care with 26.8%, 20.4% and 14.1% allocation, respectively (as of Aug 31, 2017). The fund’s top three holdings are Apple Inc, Alphabet Inc (GOOGL - Free Report) and Facebook Inc with 7.4%, 5.4% and 3.9% allocation, respectively (as of Aug 31, 2017). The fund has returned 20.7% in a year and 20.7% year to date (as of Oct 11, 2017). It currently has a Zacks ETF Rank #1 with a Medium risk outlook.
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3 Top Ranked Large-Cap Growth ETFs for Your Portfolio
U.S. equities have been rallying lately on strong global growth and rising investor optimism. Moreover, impressive profits for companies, as the earnings season is underway, have also contributed to the gains.
Market Movers
The U.S. economy registered strong growth of 3.1% in the second quarter. Although the markets still expect a rate hike in December, the latest Fed minutes have done little to assure investors of one. The argument over whether another rate hike can be supported amid still-low inflation continues, with policymakers unable to reach a consensus. However, the broad consensus is in favor of a rate hike in December and the major bourses scaled new intraday highs on Oct 11.
Moreover, energy stocks contributed to the rally, as Brent and WTI prices increased on the back of Saudi Arabia’s claims of reducing exports in order to curb the global supply glut. Investors are also optimistic about the likely successor of Janet Yellen, Kevin Warsh, as they see him as a market-friendly candidate who shares the administration’s aims on rate hikes and deregulation.
Risks Involved
Although advancement in the Republican tax reform led to initial gains in the markets, renewed doubts over President Donald Trump’s ability to pass the promised legislation weighed on investor sentiment. This was primarily driven by the fact that the International Monetary Fund reduced the U.S. economy’s growth forecast owing to lack of confidence in Trump’s ability to pass the tax reform.
Trump has been quite vocal about how markets have gained since the November elections. However, renewed uncertainty weighed on financials shares.
Moreover, geopolitical risks weigh on the markets. Per the latest report by a Russian news agency, the RIA, a Russian lawmaker’s recent visit to Pyongyang has revealed that North Koreans are prepping another long-range missile test. This missile can supposedly reach the west coast of the United States (read: Currency ETFs Amid Renewed Geopolitical Uncertainty).
Owing to large-cap companies’ high international exposure, strong global growth is expected to be a benefit for these companies. Moreover, owing to the high uncertainty in the markets, we believe it is best to opt for low volatility. Hence, we will now discuss a few ETFs focused on providing exposure to the large-cap growth space.
PowerShares QQQ ETF (QQQ - Free Report)
This fund is a popular ETF that maintains a hefty exposure to U.S. tech companies and tracks the Nasdaq 100 index (read: 4 Bargain ETFs in a Pricey Market).
It has AUM of $53.3 billion and charges a fee of 20 basis points a year. From a sector look, the fund has high exposures to Information Technology, Consumer Discretionary and Health Care with 59.5%, 21.2% and 11.4% allocation, respectively (as of Oct 10, 2017). The fund’s top three holdings are Apple Inc (AAPL - Free Report) , Microsoft Corporation (MSFT - Free Report) and Amazon.com Inc (AMZN - Free Report) with 11.6%, 8.5% and 6.8% allocation, respectively (as of Oct 10, 2017). The fund has returned 25.0% in a year and 25.0% year to date (as of Oct 11, 2017). It currently has a Zacks ETF Rank #2 (Buy) with a Medium risk outlook.
iShares Russell 1000 Growth ETF (IWF - Free Report)
This fund is a popular ETF targeting large-cap U.S. companies and tracks the Russell 1000 Growth Index.
It has AUM of $37.9 billion and charges a fee of 20 basis points a year. From a sector look, the fund has high exposures to Information Technology, Consumer Discretionary and Health Care with 37.7%, 17.7% and 13.7% allocation, respectively (as of Oct 10, 2017). The fund’s top three holdings are Apple Inc, Microsoft Corporation and Facebook Inc with 6.7%, 4.7% and 3.3% allocation, respectively (as of Oct 10, 2017). The fund has returned 22.8% in a year and 22.0% year to date (as of Oct 11, 2017). It currently has a Zacks ETF Rank #1 (Strong Buy) with a Medium risk outlook.
Vanguard Growth ETF (VUG - Free Report)
This fund is a popular ETF targeting large-cap U.S. companies and tracks the MSCI US Prime Market Growth Index.
It has AUM of $29.7 billion and charges a fee of 6 basis points a year. From a sector look, the fund has high exposures to Information Technology, Consumer Discretionary and Health Care with 26.8%, 20.4% and 14.1% allocation, respectively (as of Aug 31, 2017). The fund’s top three holdings are Apple Inc, Alphabet Inc (GOOGL - Free Report) and Facebook Inc with 7.4%, 5.4% and 3.9% allocation, respectively (as of Aug 31, 2017). The fund has returned 20.7% in a year and 20.7% year to date (as of Oct 11, 2017). It currently has a Zacks ETF Rank #1 with a Medium risk outlook.
Want key ETF info delivered straight to your inbox?
Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week. Get it free >>