We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Here's Why Growth ETFs are Ruling the 52-Week High Chart
Read MoreHide Full Article
Wall Street impressed investors with a bullish rally in November. Notably, the Dow Jones Industrial Average rose 11.8% in November — its best one-month performance since January 1987. The other broader indices, S&P 500 and Nasdaq Composite, also rallied 10.8% and 11.8%, respectively, delivering their strongest monthly advances since April.
Going on, December has also been quite impressive so far, considering the Wall Street rally. However, the worsening coronavirus outbreak has now started to worry investors and hence, the Dow Jones Industrial Average and S&P 500 declined 0.5% and 0.2%, respectively on Dec 7 after a record-setting session. Rising uncertainty about the economic outlook in the near term and increasing anticipations for another round of fiscal stimulus have put a pause on the rally in value stocks. Thus, the iShares Russell 1000 Value ETF (IWD - Free Report) declined 0.6%, whereas the iShares Russell 1000 Growth ETF (IWF - Free Report) rose 0.4% on Dec 7.
The world’s largest economy is now coming close to touching the grim-mark of 15 million coronavirus cases. In fact, the country is seeing new cases at the fastest rate ever recorder earlier. Over the past five days, the United States has recorded around a million new coronavirus cases, per a CNN report. The country has also seen a surge in coronavirus-related deaths which came in at 15,658 deaths in the past seven days, according to a CNN report.
The aggravating outbreak is also resulting in increased pressure on medical facilities as a record number of hospitalizations are taking place. As mentioned in a CNN report, more than 100,000 people are undergoing treatment for the coronavirus infection in several hospitals across the country (for the sixth consecutive day).
Seeing the concerning pace at which the virus is spreading, investors are getting worried for another round of fiscal aid to provide some support to the economy. In this regard, Adam Crisafulli, founder of Vital Knowledge, said in a note that “at this point, the market is anticipating at least several hundred billion dollars of incremental stimulus in 2020,” per a CNBC article.
However, it is worth noting here that a group of bipartisan senators announced a $908-billion "framework" for coronavirus relief aid on Dec 1, per a CNBC article. The introduction of another round of fiscal stimulus is expected to provide great support to U.S. equities.
Going on, Ed Yardeni, president and chief investment strategist at Yardeni Research has said that “renewed lockdown restrictions in response to the third wave of the pandemic are likely to weigh on the economy in coming months, but we don’t expect a double-dip. The economy could be booming next spring if enough of us are inoculated against the virus,” as mentioned in a CNBC article.
Meanwhile, encouraging progress is being witnessed in the coronavirus vaccine development amid dwindling investors’ hopes. Pfizer Inc. (PFE) and BioNTech SE (BNTX) have again posted encouraging updates regarding their coronavirus vaccine candidate, BNT162b2. The duo’s two-shot vaccine has been authorized by U.K. medicines regulator, the Medicines and Healthcare products Regulatory Agency (MHRA).
Moreover, the two front-runners in the COVID-19 vaccine race, Moderna (MRNA) and Pfizer/BioNTech, have applied to the FDA for emergency-use authorization for their coronavirus vaccines. Notably, the FDA is supposed to meet its Vaccines and Related Biological Products Advisory Committee on Dec 10 to review Pfizer's application and on Dec 17 to evaluate Moderna's application, going by a CNN report.
It is important to note here that the distribution of coronavirus vaccines could start within weeks, pending authorization from the FDA, per the U.S. Health and Human Services Secretary Alex Azar (according to a CNN report). Nevertheless, it shall be June 2021 by when all Americans (who want a vaccine) will get vaccinated, according to an official with the White House vaccine initiative, per the report mentioned above.
Thus, James Hildreth, a member of the committee, told NBC’s “Weekend Today” that an authorization for Pfizer’s coronavirus vaccine could come as early as Friday (per a CNBC article). He said that “if the FDA commissioner decides to issue approval, the EUA, on that day when the vote is taken, as early as Friday of next week we could see vaccinations happening across the country,” as mentioned in a CNBC article.
Growth ETFs at 52-Week Highs
Given the bullishness, investors seeking to capitalize on the strong trends should consider growth ETFs. However, it is worth noting that these funds offer exposure to stocks with growth characteristics that have comparatively higher P/B, P/S and P/E ratios, and exhibit a higher degree of volatility when compared to value stocks. Below we highlight a few growth ETFs that touched their 52-week highs on Dec 7:
First Trust Multi Cap Growth AlphaDEX ETF (FAD - Free Report)
The fund seeks investment results that correspond generally to the price and yield, before fees and expenses, of the NASDAQ AlphaDEX Multi Cap Growth Index. It has an expense ratio of 0.66%.
The fund provides exposure to small public U.S. companies whose earnings are expected to grow at an above-average rate relative to the market. It has an expense ratio of 0.30% (read: Small-Cap ETFs Outperforming Bigger Peers: Here's Why).
First Trust Mid Cap Growth AlphaDEX ETF (FNY - Free Report)
It seeks investment results that correspond generally to the price and yield, before the fees and expenses, of the NASDAQ AlphaDEX Mid Cap Growth Index, and charges 0.70% in fees.
It provides exposure to small public U.S. companies, earnings of which are expected to grow at an above-average rate relative to the market. The fund has an expense ratio of 0.24%.
iShares Morningstar Large-Cap Growth ETF
JKE provides exposure to large U.S. companies whose earnings are expected to grow at an above-average rate relative to the market. It charges 0.25% in fees (read: 5 Growth ETFs & Stocks to Ride the Market Rally).
First Trust Large Cap Growth AlphaDEX ETF (FTC - Free Report)
The fund seeks investment results that correspond generally to the price and yield, before fees and expenses, of the NASDAQ AlphaDEX Large Cap Growth Index. It has an expense ratio of 0.61%.
Image: Bigstock
Here's Why Growth ETFs are Ruling the 52-Week High Chart
Wall Street impressed investors with a bullish rally in November. Notably, the Dow Jones Industrial Average rose 11.8% in November — its best one-month performance since January 1987. The other broader indices, S&P 500 and Nasdaq Composite, also rallied 10.8% and 11.8%, respectively, delivering their strongest monthly advances since April.
Going on, December has also been quite impressive so far, considering the Wall Street rally. However, the worsening coronavirus outbreak has now started to worry investors and hence, the Dow Jones Industrial Average and S&P 500 declined 0.5% and 0.2%, respectively on Dec 7 after a record-setting session. Rising uncertainty about the economic outlook in the near term and increasing anticipations for another round of fiscal stimulus have put a pause on the rally in value stocks. Thus, the iShares Russell 1000 Value ETF (IWD - Free Report) declined 0.6%, whereas the iShares Russell 1000 Growth ETF (IWF - Free Report) rose 0.4% on Dec 7.
The world’s largest economy is now coming close to touching the grim-mark of 15 million coronavirus cases. In fact, the country is seeing new cases at the fastest rate ever recorder earlier. Over the past five days, the United States has recorded around a million new coronavirus cases, per a CNN report. The country has also seen a surge in coronavirus-related deaths which came in at 15,658 deaths in the past seven days, according to a CNN report.
The aggravating outbreak is also resulting in increased pressure on medical facilities as a record number of hospitalizations are taking place. As mentioned in a CNN report, more than 100,000 people are undergoing treatment for the coronavirus infection in several hospitals across the country (for the sixth consecutive day).
Seeing the concerning pace at which the virus is spreading, investors are getting worried for another round of fiscal aid to provide some support to the economy. In this regard, Adam Crisafulli, founder of Vital Knowledge, said in a note that “at this point, the market is anticipating at least several hundred billion dollars of incremental stimulus in 2020,” per a CNBC article.
However, it is worth noting here that a group of bipartisan senators announced a $908-billion "framework" for coronavirus relief aid on Dec 1, per a CNBC article. The introduction of another round of fiscal stimulus is expected to provide great support to U.S. equities.
Going on, Ed Yardeni, president and chief investment strategist at Yardeni Research has said that “renewed lockdown restrictions in response to the third wave of the pandemic are likely to weigh on the economy in coming months, but we don’t expect a double-dip. The economy could be booming next spring if enough of us are inoculated against the virus,” as mentioned in a CNBC article.
Meanwhile, encouraging progress is being witnessed in the coronavirus vaccine development amid dwindling investors’ hopes. Pfizer Inc. (PFE) and BioNTech SE (BNTX) have again posted encouraging updates regarding their coronavirus vaccine candidate, BNT162b2. The duo’s two-shot vaccine has been authorized by U.K. medicines regulator, the Medicines and Healthcare products Regulatory Agency (MHRA).
Moreover, the two front-runners in the COVID-19 vaccine race, Moderna (MRNA) and Pfizer/BioNTech, have applied to the FDA for emergency-use authorization for their coronavirus vaccines. Notably, the FDA is supposed to meet its Vaccines and Related Biological Products Advisory Committee on Dec 10 to review Pfizer's application and on Dec 17 to evaluate Moderna's application, going by a CNN report.
It is important to note here that the distribution of coronavirus vaccines could start within weeks, pending authorization from the FDA, per the U.S. Health and Human Services Secretary Alex Azar (according to a CNN report). Nevertheless, it shall be June 2021 by when all Americans (who want a vaccine) will get vaccinated, according to an official with the White House vaccine initiative, per the report mentioned above.
Thus, James Hildreth, a member of the committee, told NBC’s “Weekend Today” that an authorization for Pfizer’s coronavirus vaccine could come as early as Friday (per a CNBC article). He said that “if the FDA commissioner decides to issue approval, the EUA, on that day when the vote is taken, as early as Friday of next week we could see vaccinations happening across the country,” as mentioned in a CNBC article.
Growth ETFs at 52-Week Highs
Given the bullishness, investors seeking to capitalize on the strong trends should consider growth ETFs. However, it is worth noting that these funds offer exposure to stocks with growth characteristics that have comparatively higher P/B, P/S and P/E ratios, and exhibit a higher degree of volatility when compared to value stocks. Below we highlight a few growth ETFs that touched their 52-week highs on Dec 7:
First Trust Multi Cap Growth AlphaDEX ETF (FAD - Free Report)
The fund seeks investment results that correspond generally to the price and yield, before fees and expenses, of the NASDAQ AlphaDEX Multi Cap Growth Index. It has an expense ratio of 0.66%.
Vanguard Russell 2000 Growth ETF (VTWG - Free Report)
The fund seeks to track the performance of the Russell 2000 Growth Index. It charges 0.15% in fees (read: Here's Why Small-Cap ETFs Are Hitting New Highs).
iShares Morningstar Small-Cap Growth ETF
The fund provides exposure to small public U.S. companies whose earnings are expected to grow at an above-average rate relative to the market. It has an expense ratio of 0.30% (read: Small-Cap ETFs Outperforming Bigger Peers: Here's Why).
First Trust Mid Cap Growth AlphaDEX ETF (FNY - Free Report)
It seeks investment results that correspond generally to the price and yield, before the fees and expenses, of the NASDAQ AlphaDEX Mid Cap Growth Index, and charges 0.70% in fees.
iShares Russell 2000 Growth ETF (IWO - Free Report)
It provides exposure to small public U.S. companies, earnings of which are expected to grow at an above-average rate relative to the market. The fund has an expense ratio of 0.24%.
iShares Morningstar Large-Cap Growth ETF
JKE provides exposure to large U.S. companies whose earnings are expected to grow at an above-average rate relative to the market. It charges 0.25% in fees (read: 5 Growth ETFs & Stocks to Ride the Market Rally).
First Trust Large Cap Growth AlphaDEX ETF (FTC - Free Report)
The fund seeks investment results that correspond generally to the price and yield, before fees and expenses, of the NASDAQ AlphaDEX Large Cap Growth Index. It has an expense ratio of 0.61%.
Vanguard Growth ETF (VUG - Free Report)
It seeks to track the performance of the CRSP US Large Cap Growth Index and charges a fee of 0.04%.
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 >>