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After a weak start to 2024, the S&P 500 has staged a nice comeback, touching new record highs lately. In fact, the benchmark is on the verge of reaching the milestone of 5,000 for the first time ever and is up 4.5% so far this year.
The rally is driven by strong quarterly earnings, resilient economic and the technology sector surge amid the delayed prospect of rate cuts, geopolitical tension and overbought market conditions (read: 5 Technology Stocks Powering S&P 500 ETF to Record Highs).
The gains have been broad-based, with many ETFs outperforming the S&P 500. We have highlighted five large-cap ETFs that have gained in double digits so far this year and offer broad exposure across various sectors. These include Gabelli Growth Innovators ETF (GGRW - Free Report) , Invesco S&P 500 Momentum ETF (SPMO - Free Report) , iShares MSCI USA Momentum Factor ETF (MTUM - Free Report) , Franklin Focused Growth ETF (FFOG - Free Report) and Invesco Large Cap Growth ETF (PWB - Free Report) .
Total Q4 earnings for the 285 S&P 500 members that have reported results are up 4.4% from the same period last year on 3.5% higher revenues, with 81.1% beating EPS estimates and 64.6% beating revenue estimates. The earnings and revenue growth represent a modest acceleration, with the technology sector being the major contributor. The revenue beat percentage is modestly above the last few quarters. In fact, the 4.4% earnings growth rate is the best since the second quarter of 2022.
The resilience of the U.S. economy has played a crucial role in the S&P 500's ascent, though it has reduced the likelihood of a near-term rate cut. Factors such as robust retail sales, consumer sentiment and a cooling trend in the producer price index indicate the possibility of the Fed achieving a soft landing, bringing inflation back to target without triggering a recession. This economic resilience, coupled with surging shares of big technology companies and optimism over artificial intelligence, has been a significant driver of the market's upward trajectory.
The "Magnificent Seven" is the biggest engine of growth for the technology sector and the S&P 500 as a whole. These companies currently account for 30% of the S&P 500 index’s total market capitalization and contributed 53% growth to the S&P 500 so far this year (read: Magnificent 7 ETFs Rise on Blockbuster Earnings).
Gabelli Growth Innovators ETF is an actively managed fund that seeks to invest in companies in secular growth industries whose competitive moats will enable outsized market share gains and whose future stream of cash flows is undervalued at current market prices, according to the portfolio manager. Gabelli Growth Innovators ETF has gathered $3.7 million in its asset base and trades in an average daily volume of 3,000 shares. The product has an expense ratio of 0.90%.
Invesco S&P 500 Momentum ETF tracks the S&P 500 Momentum Index, which measures the performance of stocks in the S&P 500 index that have a high "momentum score.” It holds 101 securities in its basket and charges 13 bps in fees per year. Information technology is the top sector with a 24.9% share, while healthcare, industrials, and communication services round off the next three with double-digit exposure each. Invesco S&P 500 Momentum ETF has AUM of $342.3 million.
iShares MSCI USA Momentum Factor ETF (MTUM - Free Report) – Up 11.8%
iShares MSCI USA Momentum Factor ETF follows the MSCI USA Momentum SR Variant Index, holding 123 stocks and exhibiting a relatively higher price momentum. It is skewed toward the information sector at 41.7%, while communication, industrials, and consumer discretionary round off the next spots with double-digit exposure each. iShares MSCI USA Momentum Factor ETF has accumulated $9.6 billion in its asset base and charges 15 bps in fees per year (read: Forget Rate Cuts, Buy Top-Ranked Sector ETFs).
Franklin Focused Growth ETF seeks capital appreciation by investing predominantly in equity securities of companies that the investment manager believes offer compelling growth opportunities. The investment manager considers many factors in the selection criteria, including quality, market share and competitive positioning. FFOG holds 33 stocks in its basket, with key holdings in software & services, semiconductors & semiconductor equipment, and consumer discretionary distribution & retail.
Franklin Focused Growth ETF has amassed $63.7 million in its asset base and charges 55 bps in annual fees.
Invesco Large Cap Growth ETF (PWB - Free Report) – Up 10.9%
Invesco Large Cap Growth ETF offers exposure to the growth segment of the large-cap U.S. stock market. It tracks the Dynamic Large Cap Growth Intellidex Index, holding well-diversified 52 stocks in its basket. Information technology takes the largest share at 31.2%, followed by 19.1% in consumer discretionary and 18.7% in industrials (read: Here's Why Growth ETFs are Scaling New Highs).
Invesco Large Cap Growth ETF has amassed $797.2 million in its asset base and charges 56 bps in annual fees. It has a Zacks Rank #2 (Buy) with a Medium risk outlook.
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5 Large-Cap ETFs That Doubled the S&P 500 Gains
After a weak start to 2024, the S&P 500 has staged a nice comeback, touching new record highs lately. In fact, the benchmark is on the verge of reaching the milestone of 5,000 for the first time ever and is up 4.5% so far this year.
The rally is driven by strong quarterly earnings, resilient economic and the technology sector surge amid the delayed prospect of rate cuts, geopolitical tension and overbought market conditions (read: 5 Technology Stocks Powering S&P 500 ETF to Record Highs).
The gains have been broad-based, with many ETFs outperforming the S&P 500. We have highlighted five large-cap ETFs that have gained in double digits so far this year and offer broad exposure across various sectors. These include Gabelli Growth Innovators ETF (GGRW - Free Report) , Invesco S&P 500 Momentum ETF (SPMO - Free Report) , iShares MSCI USA Momentum Factor ETF (MTUM - Free Report) , Franklin Focused Growth ETF (FFOG - Free Report) and Invesco Large Cap Growth ETF (PWB - Free Report) .
Total Q4 earnings for the 285 S&P 500 members that have reported results are up 4.4% from the same period last year on 3.5% higher revenues, with 81.1% beating EPS estimates and 64.6% beating revenue estimates. The earnings and revenue growth represent a modest acceleration, with the technology sector being the major contributor. The revenue beat percentage is modestly above the last few quarters. In fact, the 4.4% earnings growth rate is the best since the second quarter of 2022.
The resilience of the U.S. economy has played a crucial role in the S&P 500's ascent, though it has reduced the likelihood of a near-term rate cut. Factors such as robust retail sales, consumer sentiment and a cooling trend in the producer price index indicate the possibility of the Fed achieving a soft landing, bringing inflation back to target without triggering a recession. This economic resilience, coupled with surging shares of big technology companies and optimism over artificial intelligence, has been a significant driver of the market's upward trajectory.
The "Magnificent Seven" is the biggest engine of growth for the technology sector and the S&P 500 as a whole. These companies currently account for 30% of the S&P 500 index’s total market capitalization and contributed 53% growth to the S&P 500 so far this year (read: Magnificent 7 ETFs Rise on Blockbuster Earnings).
Below, we have profiled the above-mentioned ETFs:
ETFs in Focus
Gabelli Growth Innovators ETF (GGRW - Free Report) – Up 13.8%
Gabelli Growth Innovators ETF is an actively managed fund that seeks to invest in companies in secular growth industries whose competitive moats will enable outsized market share gains and whose future stream of cash flows is undervalued at current market prices, according to the portfolio manager. Gabelli Growth Innovators ETF has gathered $3.7 million in its asset base and trades in an average daily volume of 3,000 shares. The product has an expense ratio of 0.90%.
Invesco S&P 500 Momentum ETF (SPMO - Free Report) – Up 12.6%
Invesco S&P 500 Momentum ETF tracks the S&P 500 Momentum Index, which measures the performance of stocks in the S&P 500 index that have a high "momentum score.” It holds 101 securities in its basket and charges 13 bps in fees per year. Information technology is the top sector with a 24.9% share, while healthcare, industrials, and communication services round off the next three with double-digit exposure each. Invesco S&P 500 Momentum ETF has AUM of $342.3 million.
iShares MSCI USA Momentum Factor ETF (MTUM - Free Report) – Up 11.8%
iShares MSCI USA Momentum Factor ETF follows the MSCI USA Momentum SR Variant Index, holding 123 stocks and exhibiting a relatively higher price momentum. It is skewed toward the information sector at 41.7%, while communication, industrials, and consumer discretionary round off the next spots with double-digit exposure each. iShares MSCI USA Momentum Factor ETF has accumulated $9.6 billion in its asset base and charges 15 bps in fees per year (read: Forget Rate Cuts, Buy Top-Ranked Sector ETFs).
Franklin Focused Growth ETF (FFOG - Free Report) – Up 11.6%
Franklin Focused Growth ETF seeks capital appreciation by investing predominantly in equity securities of companies that the investment manager believes offer compelling growth opportunities. The investment manager considers many factors in the selection criteria, including quality, market share and competitive positioning. FFOG holds 33 stocks in its basket, with key holdings in software & services, semiconductors & semiconductor equipment, and consumer discretionary distribution & retail.
Franklin Focused Growth ETF has amassed $63.7 million in its asset base and charges 55 bps in annual fees.
Invesco Large Cap Growth ETF (PWB - Free Report) – Up 10.9%
Invesco Large Cap Growth ETF offers exposure to the growth segment of the large-cap U.S. stock market. It tracks the Dynamic Large Cap Growth Intellidex Index, holding well-diversified 52 stocks in its basket. Information technology takes the largest share at 31.2%, followed by 19.1% in consumer discretionary and 18.7% in industrials (read: Here's Why Growth ETFs are Scaling New Highs).
Invesco Large Cap Growth ETF has amassed $797.2 million in its asset base and charges 56 bps in annual fees. It has a Zacks Rank #2 (Buy) with a Medium risk outlook.