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A Spread of Top S&P 500 ETFs to Tap Solid Q2 Earnings Growth

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After taking a hit early last week on concerns about the spread of the Delta variant of COVID-19, the three major indices bounced back strongly and ended the week at new highs. This was primarily driven by a spate of upbeat earnings and the continued optimism.

In particular, strong earnings from social media companies like Twitter (TWTR - Free Report) and Snapchat SNAP bolstered investors’ mood. Earnings from 20.6% of the S&P 500 companies reported so far are up 117.6% on 18.9% revenues with 90.3% beating EPS estimates and 85.4% beating revenue estimates. This reflects strong momentum on the revenue front both in terms of growth and the beat percentage (read: SNAP Skyrockets Post Q2 Earnings: ETFs to Play).

With the big five tech titans — Microsoft (MSFT - Free Report) , Alphabet (GOOGL - Free Report) , Apple (AAPL - Free Report) , Facebook (FB - Free Report) and Amazon (AMZN - Free Report) — scheduled to report this week, the solid trend is likely to continue. Total Q2 earnings from the group of these five companies, which combined now account for 23.3% of the total market capitalization of the S&P 500 Index, are expected to be up 48.4% on revenue growth of 29.2%.

Overall, combining the actual results for the index members that have reported with estimates for the still-to-come companies, total S&P 500 earnings are expected to be up 71.3% from the same period last year on 19.4% higher revenues, with the growth rate steadily going up as companies report better-than-expected results.

While the strong earnings trend has pushed many ETFs to new highs, we have highlighted those funds that directly or indirectly track the S&P 500 Index. Any of these could be a compelling choice to play the upcoming earnings given that they each have a Zacks ETF Rank #2 (Buy):

SPDR S&P 500 ETF Trust (SPY - Free Report)

The ETF tracks the S&P 500 and holds 505 stocks in its basket. It is the ultra-popular and most actively traded fund with AUM of $377.2 billion and an average daily volume of around 56.7 billion. The fund charges 9 bps in annual fees.

iShares Core S&P 500 ETF (IVV - Free Report)

With AUM of $293.8 billion, IVV is a lot smaller than SPY and less liquid, trading in an average daily volume of 4 million. It charges just 3 bps in annual fees, 6 bps less than the State Street product.

Vanguard S&P 500 ETF (VOO - Free Report)

This ETF also directly tracks the S&P 500 Index and holds 507 stocks in its basket. It has amassed $240.7 billion in its asset base and charges investors 3 bps in annual fees. The product trades in an average daily volume of 3.5 million shares (read: Will the Hot ETFs of First-Half 2021 Continue to Sizzle?).

SPDR Portfolio S&P 500 ETF SPLG

This fund also follows the S&P 500 Index and holds 506 stocks in its basket with 0.03% in expense ratio. It has amassed $11.3 billion in its asset base and trades in solid volume of 1.7 million shares a day on an average.

Invesco S&P 500 Top 50 ETF (XLG - Free Report)

This fund follows the S&P 500 Top 50 ETF Index, which measures the cap-weighted performance of 50 of the largest companies on the S&P 500 Index, reflecting the performance of the U.S. mega-cap stocks. It has been able to manage assets worth $2 billion but trades in a small volume of about 30,000 shares a day on average. Expense ratio comes in at 0.20%.

SPDR S&P 500 Growth ETF SPYG

This ETF offers exposure to 239 stocks that exhibit the strongest growth characteristics by tracking the S&P 500 Growth Index. It has AUM of $13.3 billion in its asset base and trades in an average daily volume of 1.9 million shares (read: A Quick Guide to the 25 Cheapest ETFs).

Invesco S&P 500 Pure Growth ETF (RPG - Free Report)

This ETF also follows the S&P 500 Pure Growth Index, holding 73 stocks in its basket. It has amassed $2.8 billion in its asset base and trades in a moderate average volume of around 44,000 shares a day. The product charges 35 bps in fees a year from investors.

Vanguard S&P 500 Growth ETF VOOG

This fund tracks the S&P 500 Growth Index, holding 239 stocks in its basket. With AUM of $2.9 billion, it has an expense ratio of 0.10% and trades in an average daily volume of 87,000 shares.

iShares S&P 500 Growth ETF (IVW - Free Report)

With AUM of $35.3 billion, this fund tracks the S&P 500 Growth Index and holds 239 stocks in its basket. It charges 18 bps in annual fees and trades in an average daily volume of 1.7 million shares.