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Wall Street logged its worst performance in two years, with the S&P 500 losing 4.9% in the first quarter. The combination of factors like skyrocketing inflation, a war in Ukraine and aggressive Fed rate hike bets led to risk-off trade. However, the companies on the S&P 500 got the most analyst Buy ratings in more than a decade.
In order to tap this bullishness, investor should bet on the ETFs that track the S&P 500 Index. These include SPDR S&P 500 ETF Trust (SPY - Free Report) , iShares Core S&P 500 ETF (IVV - Free Report) , Vanguard S&P 500 ETF (VOO - Free Report) , SPDR Portfolio S&P 500 ETF (SPLG - Free Report) and Invesco S&P 500 Top 50 ETF (XLG - Free Report) .
Bullish View
Wall Street analysts remained bullish on stocks as these have become cheap at the current levels. The S&P 500 is currently trading at P/E ratio of 25.92, down from 30.02 at the start of the year (read: U.S. Stocks Log Worst Q1 in 2 Years: Top-Ranked ETFs Shine).
According to new data from FactSet, analysts mostly had Buy ratings on stocks on the S&P 500 as a percentage of their total ratings during February and March in over a decade. Of the 10,821 ratings on companies tracked by the benchmark, 57.3% had an investment analyst recommendation to purchase their stock as of Mar 31. The last time, the percentage of Buy ratings exceeded 55% at the end of any month was at 55.8% in September 2011.
The optimistic outlook was likely driven by an increase in earnings estimates for S&P 500 companies over the past several months. Many companies on the index are expected to show double-digit revenue growth throughout 2022. Per the Earnings Trends, total S&P 500 earnings for the first quarter of 2022 are expected to be up 3.2% from the same period last year on 10.0% higher revenues.
SPDR S&P 500 ETF Trust tracks the S&P 500 Index and holds 506 stocks in its basket, with each accounting for no more than 7% of assets. SPDR S&P 500 ETF Trust is heavy on the information technology sector while healthcare, consumer discretionary and financials round off the next four spots with a double-digit allocation each (read: 5 ETFs Up 20%+ in S&P 500's Best Week Since November 2020).
SPDR S&P 500 ETF Trust charges investors 9 bps in annual fees and trades in an average daily volume of 96.8 million shares. It has AUM of $412 billion and a Zacks ETF Rank #2 (Buy) with a Medium risk outlook.
With AUM of $333.7 million, iShares Core S&P 500 ETF is a lot smaller than SPY and less liquid, trading in an average daily volume of 7.5 million. It charges just 3 bps in annual fees, 6 bps less than the State Street product. iShares Core S&P 500 ETF has a Zacks ETF Rank #3 (Hold) (read: 5 ETFs That Gained Investors' Love in Q1).
Vanguard S&P 500 ETF also directly tracks the S&P 500 Index and holds 507 stocks in its basket. It has amassed $292.7 billion in its asset base and charges investors 3 bps in annual fees. Vanguard S&P 500 ETF trades in an average daily volume of 7 million shares and has a Zacks ETF Rank #2.
SPDR Portfolio S&P 500 ETF also follows the S&P 500 Index and holds 505 stocks in its basket with 0.03% in expense ratio. It has amassed $14.8 billion in its asset base and trades in a solid volume of 6 million shares a day on an average. SPDR Portfolio S&P 500 ETF has a Zacks ETF Rank #2.
Invesco S&P 500 Top 50 ETF 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. Invesco S&P 500 Top 50 ETF has been able to manage assets worth $2.4 billion but trades in a moderate volume of about 85,000 shares a day on average. XLG charges 20 bps in annual fees and has a Zacks ETF Rank #2.
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S&P 500 ETFs to Buy on Bullish Analyst Ratings
Wall Street logged its worst performance in two years, with the S&P 500 losing 4.9% in the first quarter. The combination of factors like skyrocketing inflation, a war in Ukraine and aggressive Fed rate hike bets led to risk-off trade. However, the companies on the S&P 500 got the most analyst Buy ratings in more than a decade.
In order to tap this bullishness, investor should bet on the ETFs that track the S&P 500 Index. These include SPDR S&P 500 ETF Trust (SPY - Free Report) , iShares Core S&P 500 ETF (IVV - Free Report) , Vanguard S&P 500 ETF (VOO - Free Report) , SPDR Portfolio S&P 500 ETF (SPLG - Free Report) and Invesco S&P 500 Top 50 ETF (XLG - Free Report) .
Bullish View
Wall Street analysts remained bullish on stocks as these have become cheap at the current levels. The S&P 500 is currently trading at P/E ratio of 25.92, down from 30.02 at the start of the year (read: U.S. Stocks Log Worst Q1 in 2 Years: Top-Ranked ETFs Shine).
According to new data from FactSet, analysts mostly had Buy ratings on stocks on the S&P 500 as a percentage of their total ratings during February and March in over a decade. Of the 10,821 ratings on companies tracked by the benchmark, 57.3% had an investment analyst recommendation to purchase their stock as of Mar 31. The last time, the percentage of Buy ratings exceeded 55% at the end of any month was at 55.8% in September 2011.
The optimistic outlook was likely driven by an increase in earnings estimates for S&P 500 companies over the past several months. Many companies on the index are expected to show double-digit revenue growth throughout 2022. Per the Earnings Trends, total S&P 500 earnings for the first quarter of 2022 are expected to be up 3.2% from the same period last year on 10.0% higher revenues.
SPDR S&P 500 ETF Trust (SPY - Free Report)
SPDR S&P 500 ETF Trust tracks the S&P 500 Index and holds 506 stocks in its basket, with each accounting for no more than 7% of assets. SPDR S&P 500 ETF Trust is heavy on the information technology sector while healthcare, consumer discretionary and financials round off the next four spots with a double-digit allocation each (read: 5 ETFs Up 20%+ in S&P 500's Best Week Since November 2020).
SPDR S&P 500 ETF Trust charges investors 9 bps in annual fees and trades in an average daily volume of 96.8 million shares. It has AUM of $412 billion and a Zacks ETF Rank #2 (Buy) with a Medium risk outlook.
iShares Core S&P 500 ETF (IVV - Free Report)
With AUM of $333.7 million, iShares Core S&P 500 ETF is a lot smaller than SPY and less liquid, trading in an average daily volume of 7.5 million. It charges just 3 bps in annual fees, 6 bps less than the State Street product. iShares Core S&P 500 ETF has a Zacks ETF Rank #3 (Hold) (read: 5 ETFs That Gained Investors' Love in Q1).
Vanguard S&P 500 ETF (VOO - Free Report)
Vanguard S&P 500 ETF also directly tracks the S&P 500 Index and holds 507 stocks in its basket. It has amassed $292.7 billion in its asset base and charges investors 3 bps in annual fees. Vanguard S&P 500 ETF trades in an average daily volume of 7 million shares and has a Zacks ETF Rank #2.
SPDR Portfolio S&P 500 ETF (SPLG - Free Report)
SPDR Portfolio S&P 500 ETF also follows the S&P 500 Index and holds 505 stocks in its basket with 0.03% in expense ratio. It has amassed $14.8 billion in its asset base and trades in a solid volume of 6 million shares a day on an average. SPDR Portfolio S&P 500 ETF has a Zacks ETF Rank #2.
Invesco S&P 500 Top 50 ETF (XLG - Free Report)
Invesco S&P 500 Top 50 ETF 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. Invesco S&P 500 Top 50 ETF has been able to manage assets worth $2.4 billion but trades in a moderate volume of about 85,000 shares a day on average. XLG charges 20 bps in annual fees and has a Zacks ETF Rank #2.