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Bet on Growth ETFs to Ride the US Economic Growth Optimism
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The current U.S. economic optimism is dotted by many positive factors that can keep driving investor optimism. Factors like a better-than-expected third-quarter earnings season, the improving labor market conditions, growing consumer confidence and the passage of the much-awaited $1.2-trillion infrastructure bill have been triggering a Wall Street rally. Also, the coronavirus outbreak seems to be gradually coming under control as new cases from the highly-infectious Delta variant have been reducing since early September.
Notably, investors seeking to gain on the impressive 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 have a higher degree of volatility when compared to value stocks. Investors can consider certain ETFs like Invesco Dynamic Large Cap Growth ETF (PWB - Free Report) , SPDR Portfolio S&P 500 Growth ETF (SPYG - Free Report) , iShares S&P 500 Growth ETF (IVW - Free Report) , Schwab U.S. Large-Cap Growth ETF (SCHG - Free Report) and Vanguard S&P 500 Growth ETF (VOOG - Free Report) .
The three major U.S. stock exchanges are close to their record highs. The Dow Jones Industrial Average is about 1.3% away from its all-time high level. The S&P 500 is 0.8% and the Nasdaq Composite is 1.2% away from hitting their record high levels.
The impressive third-quarter earnings results have been keeping investors busy. The earnings results have also eased investors' worries surrounding the rising supply-chain disturbances eroding corporate profit margins. The upside in the market has also been driven by the much-anticipated announcements from the Federal Reserve. The central bank has informed about its plan to initiate the tapering of bond purchases “later this month” (per a CNBC article).
In another positive development, the U.S. jobs report for November seems very impressive. The nonfarm payrolls rose by 531,000 in October, surpassing the estimate of 450,000, per a CNBC article. Also, beating expectations, the unemployment rate declined to 4.6%, hitting a new pandemic low level (according to a CNBC article).
Wall Street has another reason to cheer as the U.S. House of Representatives has passed the more than $1-trillion infrastructure bill on Nov 5. The bill has now moved to President Biden for his signature. The legislation was approved in a 228-206 vote.
Going on, consumer confidence in the United States rose in October primarily on the heels of easing Delta variant concerns, improving labor market conditions, rebounding U.S. economy from the pandemic-led slump and accelerated coronavirus vaccine rollouts. The Conference Board's measure of consumer confidence index stands at 113.8 compared to 109.8 in September.
The metric has finally broken the streak of three consecutive monthly declines. October’s reading also beat the consensus estimate of the metric, coming in at 108.3, per a Reuters’ poll. The metric continues to be below the pre-pandemic level of 132.6 in February 2020.
Consumers seem to be looking to buy homes, motor vehicles and major household durables. In fact, the buying attitude for vehicles and homes is expanding. The survey also showed that the proportion of the population planning to go on vacation has shot up to the highest level since February 2020, as mentioned in a Reuters article.
Going on, the Atlanta Fed stated that the U.S. economy will grow 8.2% in fourth-quarter 2021 in his latest forecasts on Nov 10. This signals an improvement from the previous expectation of 6.6% on Oct 29.
Heading into the holiday season, given the reopening of domestic and international borders for traveling, we are enthusiastic about U.S. economic growth. The United States has largely relaxed travel restrictions and is reopening to completely vaccinated international travelers. The news has boosted enthusiasm for economic and travel recovery. In fact, airlines recently hinted at a solid travel trend.
Growth ETFs to Consider
Below, we have discussed in detail a few growth ETFs that could be added to the portfolio:
Invesco Dynamic Large Cap Growth ETF (PWB - Free Report)
PWB is based on the Dynamic Large Cap Growth Intellidex Index. The Style Intellidexes apply a rigorous 10-factor style isolation process to objectively segregate companies into their appropriate investment style and size universe.
Invesco Dynamic Large Cap Growth ETF has AUM of $837 million and charges an expense ratio of 0.56%. PWB carries a Zacks ETF Rank #2 (Buy), with a Medium-risk outlook. Also, Invesco Dynamic Large Cap Growth ETF trades in three-month average volumes of about 30,000 shares (read: ETF Strategies to Cheer the Market Momentum in October).
SPYG seeks to provide investment results that, before fees and expenses, generally correspond to the total return performance of the S&P 500 Growth Index. The Index contains stocks that exhibit the strongest growth characteristics based on: sales growth, earnings change to price ratio, and momentum.
SPDR Portfolio S&P 500 Growth ETF has AUM of $15.05 billion and charges an expense ratio of 0.04%. SPYG carries a Zacks ETF Rank #2, with a Medium-risk outlook. Also, SPDR Portfolio S&P 500 Growth ETF trades in three-month average volumes of about 2.3 million shares (read: ETF Strategies to Ride the Market Optimism in November).
IVW provides exposure to large U.S. companies whose earnings are expected to grow at an above-average rate relative to the market and tracks the S&P 500 Growth Index.
iShares S&P 500 Growth ETF has AUM of $38.89 billion and charges an expense ratio of 0.18%. IVW carries a Zacks ETF Rank #2, with a Medium-risk outlook. Also, iShares S&P 500 Growth ETF trades in three-month average volumes of about 1.8 million shares.
SCHG’s goal is to track as closely as possible, before fees and expenses, the total return of the Dow Jones U.S. Large-Cap Growth Total Stock Market Index.
Schwab U.S. Large-Cap Growth ETF has AUM of $17.32 billion and charges an expense ratio of 0.04%. SCHG carries a Zacks ETF Rank #2, with a Medium-risk outlook. Also, Schwab U.S. Large-Cap Growth ETF trades in three-month average volumes of about 345,000 shares.
VOOG seeks to track the performance of the S&P 500 Growth Index.
Vanguard S&P 500 Growth ETF has AUM of $7.36 billion and charges an expense ratio of 0.10%. VOOG carries a Zacks ETF Rank #2, with a Medium-risk outlook. Also, Vanguard S&P 500 Growth ETF trades in three-month average volumes of about 107,000 shares.
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Bet on Growth ETFs to Ride the US Economic Growth Optimism
The current U.S. economic optimism is dotted by many positive factors that can keep driving investor optimism. Factors like a better-than-expected third-quarter earnings season, the improving labor market conditions, growing consumer confidence and the passage of the much-awaited $1.2-trillion infrastructure bill have been triggering a Wall Street rally. Also, the coronavirus outbreak seems to be gradually coming under control as new cases from the highly-infectious Delta variant have been reducing since early September.
Notably, investors seeking to gain on the impressive 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 have a higher degree of volatility when compared to value stocks. Investors can consider certain ETFs like Invesco Dynamic Large Cap Growth ETF (PWB - Free Report) , SPDR Portfolio S&P 500 Growth ETF (SPYG - Free Report) , iShares S&P 500 Growth ETF (IVW - Free Report) , Schwab U.S. Large-Cap Growth ETF (SCHG - Free Report) and Vanguard S&P 500 Growth ETF (VOOG - Free Report) .
The three major U.S. stock exchanges are close to their record highs. The Dow Jones Industrial Average is about 1.3% away from its all-time high level. The S&P 500 is 0.8% and the Nasdaq Composite is 1.2% away from hitting their record high levels.
The impressive third-quarter earnings results have been keeping investors busy. The earnings results have also eased investors' worries surrounding the rising supply-chain disturbances eroding corporate profit margins. The upside in the market has also been driven by the much-anticipated announcements from the Federal Reserve. The central bank has informed about its plan to initiate the tapering of bond purchases “later this month” (per a CNBC article).
In another positive development, the U.S. jobs report for November seems very impressive. The nonfarm payrolls rose by 531,000 in October, surpassing the estimate of 450,000, per a CNBC article. Also, beating expectations, the unemployment rate declined to 4.6%, hitting a new pandemic low level (according to a CNBC article).
Wall Street has another reason to cheer as the U.S. House of Representatives has passed the more than $1-trillion infrastructure bill on Nov 5. The bill has now moved to President Biden for his signature. The legislation was approved in a 228-206 vote.
Going on, consumer confidence in the United States rose in October primarily on the heels of easing Delta variant concerns, improving labor market conditions, rebounding U.S. economy from the pandemic-led slump and accelerated coronavirus vaccine rollouts. The Conference Board's measure of consumer confidence index stands at 113.8 compared to 109.8 in September.
The metric has finally broken the streak of three consecutive monthly declines. October’s reading also beat the consensus estimate of the metric, coming in at 108.3, per a Reuters’ poll. The metric continues to be below the pre-pandemic level of 132.6 in February 2020.
Consumers seem to be looking to buy homes, motor vehicles and major household durables. In fact, the buying attitude for vehicles and homes is expanding. The survey also showed that the proportion of the population planning to go on vacation has shot up to the highest level since February 2020, as mentioned in a Reuters article.
Going on, the Atlanta Fed stated that the U.S. economy will grow 8.2% in fourth-quarter 2021 in his latest forecasts on Nov 10. This signals an improvement from the previous expectation of 6.6% on Oct 29.
Heading into the holiday season, given the reopening of domestic and international borders for traveling, we are enthusiastic about U.S. economic growth. The United States has largely relaxed travel restrictions and is reopening to completely vaccinated international travelers. The news has boosted enthusiasm for economic and travel recovery. In fact, airlines recently hinted at a solid travel trend.
Growth ETFs to Consider
Below, we have discussed in detail a few growth ETFs that could be added to the portfolio:
Invesco Dynamic Large Cap Growth ETF (PWB - Free Report)
PWB is based on the Dynamic Large Cap Growth Intellidex Index. The Style Intellidexes apply a rigorous 10-factor style isolation process to objectively segregate companies into their appropriate investment style and size universe.
Invesco Dynamic Large Cap Growth ETF has AUM of $837 million and charges an expense ratio of 0.56%. PWB carries a Zacks ETF Rank #2 (Buy), with a Medium-risk outlook. Also, Invesco Dynamic Large Cap Growth ETF trades in three-month average volumes of about 30,000 shares (read: ETF Strategies to Cheer the Market Momentum in October).
SPDR Portfolio S&P 500 Growth ETF (SPYG - Free Report)
SPYG seeks to provide investment results that, before fees and expenses, generally correspond to the total return performance of the S&P 500 Growth Index. The Index contains stocks that exhibit the strongest growth characteristics based on: sales growth, earnings change to price ratio, and momentum.
SPDR Portfolio S&P 500 Growth ETF has AUM of $15.05 billion and charges an expense ratio of 0.04%. SPYG carries a Zacks ETF Rank #2, with a Medium-risk outlook. Also, SPDR Portfolio S&P 500 Growth ETF trades in three-month average volumes of about 2.3 million shares (read: ETF Strategies to Ride the Market Optimism in November).
iShares S&P 500 Growth ETF (IVW - Free Report)
IVW provides exposure to large U.S. companies whose earnings are expected to grow at an above-average rate relative to the market and tracks the S&P 500 Growth Index.
iShares S&P 500 Growth ETF has AUM of $38.89 billion and charges an expense ratio of 0.18%. IVW carries a Zacks ETF Rank #2, with a Medium-risk outlook. Also, iShares S&P 500 Growth ETF trades in three-month average volumes of about 1.8 million shares.
Schwab U.S. Large-Cap Growth ETF (SCHG - Free Report)
SCHG’s goal is to track as closely as possible, before fees and expenses, the total return of the Dow Jones U.S. Large-Cap Growth Total Stock Market Index.
Schwab U.S. Large-Cap Growth ETF has AUM of $17.32 billion and charges an expense ratio of 0.04%. SCHG carries a Zacks ETF Rank #2, with a Medium-risk outlook. Also, Schwab U.S. Large-Cap Growth ETF trades in three-month average volumes of about 345,000 shares.
Vanguard S&P 500 Growth ETF (VOOG - Free Report)
VOOG seeks to track the performance of the S&P 500 Growth Index.
Vanguard S&P 500 Growth ETF has AUM of $7.36 billion and charges an expense ratio of 0.10%. VOOG carries a Zacks ETF Rank #2, with a Medium-risk outlook. Also, Vanguard S&P 500 Growth ETF trades in three-month average volumes of about 107,000 shares.