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Longest Bull Run for US Market: 5 Growth ETF Picks
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The equity bull market turns 3,453 days on Aug 22, marking the longest stretch in American history. The markets began scaling upward on Mar 9, 2009, the day the slide in U.S. stocks was checked after the worst market rout since the Great Depression.
On Mar 6, 2009, the S&P 500 touched a bear market nadir of 666.79, only to stage an astral rally to about 2873. The Dow shot up from around 6,500 to more than 25,800. The longest bull run before this started in October 1990 and “ended with the bursting of the dotcom bubble in March 2000,” per CNNmoney.
The latest rally did have hiccups. Over the last decade, the global investing backdrop has seen key developments. These include the subprime mortgage crisis, the fall of the investment bank Lehman Brothers in September 2008, the United States losing its triple-A credit rating, the Fed’s QE to boost an economy in recession, the Euro zone debt crisis, Abenomics in Japan, the Taper Tantrum in the United States, China’s soft-landing issues, oil price massacre, initiation of QE by ECB, Brexit, the start of Trump era and many more.
Finally, the Wall Street has gained back a firm footing. The U.S. economy advanced at a 4.1% annual rate (the best clip in nearly four years) in Q2, higher than 2.2% expansion in the previous period and in line with market expectations (read: 5 ETFs to Buy as Q2 GDP Growth Hits 4-Year High of 4.1%).
The labor market is steady and retail sales have been pretty encouraging in the United States. The tax reform is yet another boon for U.S. stocks. Corporate earnings have been in great shape (read: 4 ETFs in Focus Post July Jobs Data).
Though other corners of the globe have shown remarkable improvement, those are yet to attain a full-fledged recovery, which made the United States apparently a new safe haven for equity investors, per some analysts.
Are More Gains or Correction in Store for Wall Street?
Overvaluation concerns are quite rampant at the current level, after such an astounding rally. And if anything positive does not turn out in the US-China trade meet, stocks may take a hit.
Meanwhile, several analysts opine that the bull market is going to stretch. David Kotok, chairman and chief investment officer of Cumberland Advisors, believes that the S&P 500 will rise to 3,000 before the end of the decade on solid corporate earnings. “True bear markets are associated with recessions,” per chief investment officer at Greenwood Capital Associates. And most analysts do not see signs of recession.
Companies in the S&P 500 are on track to see earnings growth of 24.7% in Q2, following a jump of 24.6% in Q1. “Earnings haven't grown that fast since 2010, and analysts expect profit growth to top 20 percent in the final half of the year”, per Thomson Reuters data.
No doubt, the valuation is expensive but that not sky-high, sparking a fear for bubble. At present, the market's price-to-earnings ratio or PE is around 19, slightly above the 30-year average of 17.6, per earnings-tracker Thomson Reuters, as quoted on usatoday.com.
All these indicate that the market is in fine fettle and investors may want to focus on the below-mentioned growth ETFs that have relatively lower P/E (read: 4 Sector ETFs That Crushed S&P 500 in 9-Year Bull Run).
The fund seeks capital appreciation by applying a bottom-up stock selection and portfolio construction process with the goal of generating consistent, long-term risk-adjusted performance. Technology is the top sector, with about 30.8% exposure.
The underlying index consists of those stocks in the S&P MidCap 400 Index exhibiting the strongest growth characteristics based on sales growth, earnings change to price and momentum. Information Technology takes the top spot with about 22.1% focus, followed by consumer discretionary (17%).
The fund measures the performance of the large-capitalization growth sector in the U.S. equity market. Here also, Information technology takes more than 40% of the portfolio.
The underlying index tracks the performance of securities that exhibit strong growth characteristics in the S&P SmallCap 600 Index. Health Care takes about 27.74% of the fund, followed by 23.14% exposure.
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Longest Bull Run for US Market: 5 Growth ETF Picks
The equity bull market turns 3,453 days on Aug 22, marking the longest stretch in American history. The markets began scaling upward on Mar 9, 2009, the day the slide in U.S. stocks was checked after the worst market rout since the Great Depression.
On Mar 6, 2009, the S&P 500 touched a bear market nadir of 666.79, only to stage an astral rally to about 2873. The Dow shot up from around 6,500 to more than 25,800. The longest bull run before this started in October 1990 and “ended with the bursting of the dotcom bubble in March 2000,” per CNNmoney.
Though by duration, it is the best bull market ever, by performance it is not. The S&P 500 advanced 324%, which comes next to the 417% jump during the 1990-2000 run, per CNNmoney (read: 9 ETFs That Emerged Bulls From the Bottom of Bear Market).
The latest rally did have hiccups. Over the last decade, the global investing backdrop has seen key developments. These include the subprime mortgage crisis, the fall of the investment bank Lehman Brothers in September 2008, the United States losing its triple-A credit rating, the Fed’s QE to boost an economy in recession, the Euro zone debt crisis, Abenomics in Japan, the Taper Tantrum in the United States, China’s soft-landing issues, oil price massacre, initiation of QE by ECB, Brexit, the start of Trump era and many more.
Finally, the Wall Street has gained back a firm footing. The U.S. economy advanced at a 4.1% annual rate (the best clip in nearly four years) in Q2, higher than 2.2% expansion in the previous period and in line with market expectations (read: 5 ETFs to Buy as Q2 GDP Growth Hits 4-Year High of 4.1%).
The labor market is steady and retail sales have been pretty encouraging in the United States. The tax reform is yet another boon for U.S. stocks. Corporate earnings have been in great shape (read: 4 ETFs in Focus Post July Jobs Data).
Though other corners of the globe have shown remarkable improvement, those are yet to attain a full-fledged recovery, which made the United States apparently a new safe haven for equity investors, per some analysts.
Are More Gains or Correction in Store for Wall Street?
Overvaluation concerns are quite rampant at the current level, after such an astounding rally. And if anything positive does not turn out in the US-China trade meet, stocks may take a hit.
Meanwhile, several analysts opine that the bull market is going to stretch. David Kotok, chairman and chief investment officer of Cumberland Advisors, believes that the S&P 500 will rise to 3,000 before the end of the decade on solid corporate earnings. “True bear markets are associated with recessions,” per chief investment officer at Greenwood Capital Associates. And most analysts do not see signs of recession.
Companies in the S&P 500 are on track to see earnings growth of 24.7% in Q2, following a jump of 24.6% in Q1. “Earnings haven't grown that fast since 2010, and analysts expect profit growth to top 20 percent in the final half of the year”, per Thomson Reuters data.
No doubt, the valuation is expensive but that not sky-high, sparking a fear for bubble. At present, the market's price-to-earnings ratio or PE is around 19, slightly above the 30-year average of 17.6, per earnings-tracker Thomson Reuters, as quoted on usatoday.com.
All these indicate that the market is in fine fettle and investors may want to focus on the below-mentioned growth ETFs that have relatively lower P/E (read: 4 Sector ETFs That Crushed S&P 500 in 9-Year Bull Run).
SPDR MFS Systematic Growth Equity ETF – P/E 15.27x
The fund seeks capital appreciation by applying a bottom-up stock selection and portfolio construction process with the goal of generating consistent, long-term risk-adjusted performance. Technology is the top sector, with about 30.8% exposure.
Direxion NASDAQ-100 Equal Weighted Index Shares (QQQE - Free Report) – P/E 17.20x
The underlying index consists of companies in the NASDAQ-100 Index but each of the securities is initially set at a weight of 1.00% of the Index.
SPDR S&P 400 Mid Cap Growth ETF (MDYG - Free Report) – 20.33x
The underlying index consists of those stocks in the S&P MidCap 400 Index exhibiting the strongest growth characteristics based on sales growth, earnings change to price and momentum. Information Technology takes the top spot with about 22.1% focus, followed by consumer discretionary (17%).
SPDR Portfolio S&P 500 Growth ETF (SPYG - Free Report) – 20.38x
The fund measures the performance of the large-capitalization growth sector in the U.S. equity market. Here also, Information technology takes more than 40% of the portfolio.
Invesco S&P SmallCap 600 Pure Growth ETF (RZG - Free Report) – 21.57x
The underlying index tracks the performance of securities that exhibit strong growth characteristics in the S&P SmallCap 600 Index. Health Care takes about 27.74% of the fund, followed by 23.14% exposure.
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 >>