Investors saw a decent Wall Street performance in April. The S&P 500 index saw its third consecutive month of gains last month, rising more than 5%. The other two broader indices like the Dow Jones Industrial Average and Nasdaq Composite were up 2.7% and 5.4%, respectively, in April. Notably, investors continue to be optimistic about recovery in economic growth from the pandemic-led slowdown.

In this regard, Jack Ablin, chief investment officer at Cresset Capital, has said that “investors are gearing up for another busy earnings week capped off with a widely watched jobs report. Given the positive economic and earnings news, the path of least resistance appears higher,” per a CNBC article.

Investors who want to gain from the steadily recovering U.S. economy can consider momentum ETFs. Before discussing about the available ETF options in details, here we highlight the most powerful reasons why you should invest in them:

Streak of Upbeat U.S. Economic Data

The U.S. economy grew an annualized 6.4% in the first quarter of 2021, breezing past expectations of 6.1%, following a 4.3% uptick in the previous three-month period. Apart from the reopening-driven third-quarter jump last year, the latest reading marked the best period for GDP since the third quarter of 2003.

The latest U.S. consumer confidence data looks encouraging as the metric has risen for the second consecutive month in April. Markedly, the metric had hit a one-year high in March. The Conference Board's measure of consumer confidence index stands at 121.7 for April, comparing favorably with March’s revised reading of 109. Moreover, April’s reading beat the consensus estimate of 113.0, per a Reuters’ poll. Notably, the metric stands at the highest level since last February, when the index was at 132.6.

Falling New COVID-19 Cases

The world’s largest economy is seeing a decline in the seven-day average of daily cases now. The metric dropped to under 50,000, declining 17% from the previous week (as of May 1), per a CNBC article. There has also been a decline in the number of hospitalizations along with a decreasing death toll from coronavirus infections.

In fact, former U.S. FDA commissioner Scott Gottlieb is predicting a “relatively quiet summer when it comes to coronavirus spread,” as mentioned in a CNBC article. Going by the same article, he has also said on CBS News that “look, the situation in the U.S. continues to improve, and I think in the coming weeks we are going to see an acceleration in the decline in cases.”

Accelerated Vaccine Drive

A large COVID-19 vaccination drive has buoyed hopes of faster U.S. economic reopening of non-essential businesses and the return to normalcy. Strengthening the optimism, the United States has administered around 200 million doses of vaccines under 100 days of Biden administration, per a CNN report. According to the U.S. Centers for Disease Control and Prevention (CDC), more than half of American adults have received at least one vaccine dose, per a Reuters article.

Momentum ETFs Worth Your Attention

Momentum investing looks to fetch profits from hot stocks that have shown an uptrend over the past few weeks or months. Here we present five ETFs that could outperform on the current market optimism. Further, these could beat broader market returns in the coming months if the optimism prevails.

iShares MSCI USA Momentum Factor ETF (MTUM Quick QuoteMTUM - 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 and is a popular choice, with AUM of $14.95 billion (read: ETF Strategies to Play the US Market Optimism).

Invesco DWA Momentum ETF (PDP Quick QuotePDP - Free Report)

This fund tracks the Dorsey Wright Technical Leaders Index, which measures the performance of companies that demonstrate powerful relative strength characteristics. It has amassed $1.81 billion in its asset base and charges 62 bps in annual fees (read: Momentum ETFs to Gain From the New Stimulus Optimism).

Invesco S&P MidCap Momentum ETF (XMMO Quick QuoteXMMO - Free Report)

This ETF follows the S&P Midcap 400 Momentum Index, which is designed to identify mid-cap firms with the highest momentum scores. XMMO has AUM of $971.5 million and an expense ratio of 0.34% (read: ETF Investing Areas Looking Attractive After a Blue Wave).

VictoryShares USAA MSCI USA Value Momentum ETF (ULVM Quick QuoteULVM - Free Report)

This fund tracks the MSCI USA Select Value Momentum Blend Index, offering exposure to large and mid-cap companies with higher exposure to value and momentum factors, while maintaining a moderate turnover and lower realized volatility compared with the traditional capitalization weighted indices. It accumulated $449.5 million in AUM and charges 0.20% in expense ratio.

SPDR Russell 1000 Momentum Focus ETF (ONEO Quick QuoteONEO - Free Report)

With AUM of $289.3 million, this product targets large-cap securities with a combination of core factors (high value, high quality and low size characteristics) and a focus factor comprising high momentum characteristics. It follows the Russell 1000 Momentum Focused Factor Index and charges an annual fee of 20 bps (read: 4 Momentum ETFs That Still Offer Value).

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