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Top-Ranked ETFs to Buy as S&P 500 Nears Record High
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The S&P 500 is hovering near record highs as inflation fears have subsided and the economy is witnessing a speedy recovery with millions of Americans fully vaccinated and pandemic restrictions being rolled back. The expanded stimulus and strong corporate earnings are adding to the strength (read: Q1 Earnings Effect: 5 Must-Watch ETF Charts).
Additionally, the bouts of latest data are bolstering investors’ confidence driving the stocks higher. This is because the combination is leading to pent-up demand, resulting in higher demand for all types of products and services in the economy. Notably, U.S. manufacturing activity hit a record high in May for the second straight month supported by stronger expansion in output and new orders. Meanwhile, the core personal consumption expenditures index increased by 3.1% in April from a year ago, sharply higher than the March reading of 1.9% and the highest reading since 1992.
Further, lower interest rates have made borrowings cheaper, providing a boost to both investment in new projects and repayment of higher-rate debt. Consequently, it leads to strong economic growth and is thus a boon for the stock market.
Moreover, the return of travel demand, after being badly hit over the past year, is infusing fresh optimism into economic growth. More Americans are expected to return to the road. According to TripAdvisor (TRIP - Free Report) , about 67% of Americans expect to travel this summer, with 74% staying in the United States. The outdoor activities that American families are eyeing this summer include beach day, socially distanced barbecue day, camping trip and pool day. The rebound in travel should support further stock rally (read: 4 ETFs & Stocks to Buy This Summer From Top Sectors).
Given the bullish fundamentals, investors seeking to make profits from further surge in the stock market could consider the following ETFs. These funds are popular options and offer a broad exposure to the stock market. These have a Zacks ETF Rank #2 (Buy), suggesting their outperformance in the coming months.
This fund tracks the S&P 500 Index, holding 505 stocks in its basket. It is the ultra-popular and oldest U.S. equity ETF with AUM of $361.2 billion. SPY is the most actively traded fund with an average daily volume of around 63.2 million shares and 0.09% in expense ratio. Information technology takes the top spot at 26.4% of assets while healthcare, consumer discretionary and financials round off the next three spots with a double-digit exposure each. The product has a Zacks ETF Rank #2.
This ETF follows the S&P 100 Index, charging investors 20 bps in annual fees. It holds 101 stocks in its basket with key holdings in information technology occupying the top spot at 30.5% share. Communication, consumer discretionary, health care and financials are the next four spots. The product has AUM of $7.4 billion and trades in an average daily volume of 181,000 shares. It has a Zacks ETF Rank #2.
This fund offers exposure to large U.S. companies by tracking the Russell 1000 Index. It holds a broad basket of 1,019 stocks in its basket with key holdings in information technology, health care, financials, consumer discretionary and communication. IWB has amassed $29.2 billion and trades in an average daily volume of 534,000 shares. It has a Zacks Rank #2 (read: 5 Sector ETFs Hitting New Highs Amid Market Volatility).
This fund tracks the Dow Jones U.S. Large-Cap Total Stock Market Index, charging investors 3 bps in fees per year. Information technology takes the top spot at 27.1% of assets while healthcare, consumer discretionary, financials and communication services round off the next spots with a double-digit exposure each. The product has AUM of $30.1 billion and volume is solid at 757,000 shares on average per day. It has a Zacks ETF Rank #2.
Goldman Sachs ActiveBeta U.S. Large Cap Equity ETF (GSLC - Free Report)
With AUM of $12.5 billion, this fund seeks to offer exposure to 457 stocks with four well-established attributes of performance: good value, strong momentum, high quality and low volatility. It tracks the Goldman Sachs ActiveBeta U.S. Large Cap Equity Index, charging investors 9 bps in annual fees. The fund trades in an average daily volume of 464,000 shares and has a Zacks ETF Rank #2.
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Top-Ranked ETFs to Buy as S&P 500 Nears Record High
The S&P 500 is hovering near record highs as inflation fears have subsided and the economy is witnessing a speedy recovery with millions of Americans fully vaccinated and pandemic restrictions being rolled back. The expanded stimulus and strong corporate earnings are adding to the strength (read: Q1 Earnings Effect: 5 Must-Watch ETF Charts).
Additionally, the bouts of latest data are bolstering investors’ confidence driving the stocks higher. This is because the combination is leading to pent-up demand, resulting in higher demand for all types of products and services in the economy. Notably, U.S. manufacturing activity hit a record high in May for the second straight month supported by stronger expansion in output and new orders. Meanwhile, the core personal consumption expenditures index increased by 3.1% in April from a year ago, sharply higher than the March reading of 1.9% and the highest reading since 1992.
Further, lower interest rates have made borrowings cheaper, providing a boost to both investment in new projects and repayment of higher-rate debt. Consequently, it leads to strong economic growth and is thus a boon for the stock market.
Moreover, the return of travel demand, after being badly hit over the past year, is infusing fresh optimism into economic growth. More Americans are expected to return to the road. According to TripAdvisor (TRIP - Free Report) , about 67% of Americans expect to travel this summer, with 74% staying in the United States. The outdoor activities that American families are eyeing this summer include beach day, socially distanced barbecue day, camping trip and pool day. The rebound in travel should support further stock rally (read: 4 ETFs & Stocks to Buy This Summer From Top Sectors).
Given the bullish fundamentals, investors seeking to make profits from further surge in the stock market could consider the following ETFs. These funds are popular options and offer a broad exposure to the stock market. These have a Zacks ETF Rank #2 (Buy), suggesting their outperformance in the coming months.
SPDR S&P 500 ETF Trust (SPY - Free Report)
This fund tracks the S&P 500 Index, holding 505 stocks in its basket. It is the ultra-popular and oldest U.S. equity ETF with AUM of $361.2 billion. SPY is the most actively traded fund with an average daily volume of around 63.2 million shares and 0.09% in expense ratio. Information technology takes the top spot at 26.4% of assets while healthcare, consumer discretionary and financials round off the next three spots with a double-digit exposure each. The product has a Zacks ETF Rank #2.
iShares S&P 100 ETF (OEF - Free Report)
This ETF follows the S&P 100 Index, charging investors 20 bps in annual fees. It holds 101 stocks in its basket with key holdings in information technology occupying the top spot at 30.5% share. Communication, consumer discretionary, health care and financials are the next four spots. The product has AUM of $7.4 billion and trades in an average daily volume of 181,000 shares. It has a Zacks ETF Rank #2.
iShares Russell 1000 ETF (IWB - Free Report)
This fund offers exposure to large U.S. companies by tracking the Russell 1000 Index. It holds a broad basket of 1,019 stocks in its basket with key holdings in information technology, health care, financials, consumer discretionary and communication. IWB has amassed $29.2 billion and trades in an average daily volume of 534,000 shares. It has a Zacks Rank #2 (read: 5 Sector ETFs Hitting New Highs Amid Market Volatility).
Schwab U.S. Large-Cap ETF (SCHX - Free Report)
This fund tracks the Dow Jones U.S. Large-Cap Total Stock Market Index, charging investors 3 bps in fees per year. Information technology takes the top spot at 27.1% of assets while healthcare, consumer discretionary, financials and communication services round off the next spots with a double-digit exposure each. The product has AUM of $30.1 billion and volume is solid at 757,000 shares on average per day. It has a Zacks ETF Rank #2.
Goldman Sachs ActiveBeta U.S. Large Cap Equity ETF (GSLC - Free Report)
With AUM of $12.5 billion, this fund seeks to offer exposure to 457 stocks with four well-established attributes of performance: good value, strong momentum, high quality and low volatility. It tracks the Goldman Sachs ActiveBeta U.S. Large Cap Equity Index, charging investors 9 bps in annual fees. The fund trades in an average daily volume of 464,000 shares and has a Zacks ETF Rank #2.
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 >>