The month of July was marked with huge volatility for Wall Street. While concerns about the spread of the Delta variant of COVID-19 made investors jittery, a spate of upbeat corporate earnings and continued optimism bolstered risk-on trade. The S&P 500 logged its sixth consecutive month of gain.
The picture emerging from the Q2 earnings season is one of all-round strength, with aggregate total quarterly earnings on track to reach a new all-time record and impressive momentum on the revenue side. Total earnings for 59.3% of the S&P 500 total membership reported so far are up 102% from the same period last year on 26.8% higher revenues, with 89.2% beating EPS estimates and a record 87.5% beating revenue estimates. Combining the results that have come up with estimates for the still-to-come companies, total earnings for the S&P 500 Index are expected to be up 88.3% from the same period last year on 22.2% higher revenues. This would follow 49.9% earnings growth on 10.3% higher revenues in Q1 of 2021. Additionally, rounds of upbeat data added to the strength. The U.S. economy returned to the pre-pandemic level with GDP rising 6.5% annually in the second quarter, indicating the sustained recovery from the pandemic recession. Rapid vaccinations, business reopenings and trillions of dollars of government stimulus spending powered consumer spending and resulted in robust growth. Consumer confidence rose to a 17-month high in July, suggesting that consumer spending should support robust growth in the second half of this year (read: U.S. Economy Returns to Pre-Pandemic Level: 4 ETF Picks). Although stock market gains have not been broad-based, several ETFs easily crushed the market by wide margins last month and have a solid Zacks ETF Rank #1 (Strong Buy) or 2 (Buy). Below we have presented five top-performing ETFs from various corners of the market that are likely to continue outperforming, should the trends prevail. Invesco S&P 500 Pure Growth ETF ( RPG Quick Quote RPG - Free Report) – Up 4.6% This ETF follows the S&P 500 Pure Growth Index and offers exposure to 73 growth stocks in the large-cap segment. It has amassed $2.8 billion in its asset base and trades in a lower average volume of around 47,000 shares a day. The product charges 35 bps in fees a year from investors and has a Zacks ETF Rank #2 (read: A Spread of Top S&P 500 ETFs to Tap Solid Q2 Earnings Growth). iShares U.S. Technology ETF ( IYW Quick Quote IYW - Free Report) – Up 3.9% This ETF offers exposure to U.S. electronics, computer software and hardware, and informational technology companies by tracking the Dow Jones US Technology Index. The fund has amassed $8.2 billion in its asset base and charges 43 bps in fees and expenses. Volume is good as it exchanges nearly 449,000 shares in hand a day. The fund has a Zacks ETF Rank #2. Health Care Select Sector SPDR Fund ( XLV Quick Quote XLV - Free Report) – Up 3.9% This is the most-popular ETF targeting a broad healthcare space and follows the Health Care Select Sector Index. It manages nearly $32.2 billion in its asset base and trades in a heavy volume of around 9 million shares. The fund holds 64 securities in its basket and charges 12 bps in annual fees. It has a Zacks ETF Rank #1. Motley Fool 100 Index ETF ( TMFC Quick Quote TMFC - Free Report) – Up 3.7% This fund offers exposure to companies with a high return on assets, high return on equity, and high profit margins by tracking the Fool 100 Index. It holds 102 securities in its basket and charges 50 bps in annual fees. The product has AUM of $510 million and carries a Zacks ETF Rank #2. O'Shares FTSE US Quality Dividend ETF ( OUSA Quick Quote OUSA - Free Report) – Up 2.7% This fund targets large-cap and mid-cap dividend-paying issuers in the United States that meet certain market capitalization, liquidity, high quality, low volatility and dividend yield thresholds, as determined by FTSE Russell. It has accumulated $720.5 million in its asset base and charges 48 bps in fees per year from investors. OUSA trades in an average daily volume of 47,000 shares and has a Zacks ETF Rank #2 (read: 5 Top-Ranked ETFs to Buy on Dovish Fed Minutes).