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After two tumultuous weeks, Wall Street rebounded on fresh hopes of tax reform with both the S&P 500 and the Dow Jones ending the week higher. President Donald Trump is expected to start a campaign for the highly anticipated tax reform next week.

Market is speculating that tax reform will be easier to pass than the failed healthcare reform as the administration does not have a "fixed or detailed plan for tax reform" and will leave it to the congressional committees to finalize the legislation.

As per Trump’s chief economic advisor Gary Cohn, the tax reform plan will protect personal charitable, mortgage and retirement savings deductions but take away other deductions. He said the White House wants to include one-time corporate tax repatriation on overseas profits and a move to a territorial system, and eliminate death and estate taxes. For corporations, the plan will lower the overall tax rate in exchange for eliminating other deductions (read: Time for Momentum ETFs as Tax Cut Odds Rise?).

Additionally, speeches by Federal Reserve Chair Janet Yellen and European Central Bank President Mario Draghi added to the strength. Yellen stated that financial system is safer now than it was in the years surrounding the housing crisis. Draghi said that global recovery is firming up.

Given this, investors should cash in on the opportunity with ETFs deemed to gain on higher prospects of tax reforms. Below, we have highlighted some of the funds that are considered excellent when the market is set to climb or when tax reforms are enacted.

iShares Russell 2000 Growth ETF (IWO - Free Report)

Growth funds could be good bets as these tend to outperform in an uptrend. Growth stocks refer to high-quality stocks that are likely to witness revenue and earnings increase at a faster rate than the industry average. These stocks harness their momentum in earnings to create a positive bias in the market, resulting in rocketing share prices. Further, honing in on small cap funds in the growth space could lead to a win-to-win situation as small companies pay huge taxes in America and a tax cut could be a big boon to these companies. IWO offers exposure to small cap companies whose earnings are expected to grow at an above-average rate relative to the market. It charges 0.24% in expense ratio and has $8 billion in AUM. The fund has a Zacks ETF Rank of #2 (Buy) with a High risk outlook (read: Small Cap Growth ETF Hits New 52-Week High).

PowerShares S&P 500 High Beta Portfolio (SPHB - Free Report)

High beta funds seek to capitalize on continued growth with market-beating returns. This is because when markets soar, high beta stocks experience larger gains than the broader market counterparts and thus, outpace their rivals. SPHB tracks the performance of stocks from the S&P 500 Index with the highest realized volatility over 12 months. The fund has amassed $ 127.9 million in its asset base and charges 25 bps in fees and expenses.

iShares Edge MSCI USA Momentum Factor ETF (MTUM - Free Report)     

Momentum investing would be a winning strategy for those seeking higher returns in a short spell. The strategy looks to capture profits from buying hot stocks that have shown an uptrend over the past few weeks or months. In particular, MTUM provides exposure to large and mid-cap stocks that exhibit relatively higher price momentum by tracking the MSCI USA Momentum Index. It charges 15 bps in fees per year and is the popular choice with AUM of $3.7 billion.

PowerShares Buyback Achievers Portfolio (PKW - Free Report)     

Trump’s push through tax reforms is expected to benefit buyback ETFs. This is because lower corporate taxes would boost companies’ profitability that may drive companies to increase shareholders’ wealth. PKW tracks the NASDAQ US Buyback Achievers Index, which comprises companies that have repurchased 5% or more of their common stock in the trailing 12 months. PKW is one of the popular funds in the niche space, managing an asset base of $1.3 billion and charging a higher annual fee of 63 bps (read: Will Trump's Tax Plan Boost or Bust Buyback ETFs?).

iShares Core Dividend Growth ETF (DGRO - Free Report)     

Tax savings will likely result in fatter and faster dividend hikes, thereby raising the appeal for dividend products. In particular, dividend growth ETFs like DGRO will benefit the most from the enactment of the tax reform. The fund provides exposure to companies having a history of consistently growing dividends. It has accumulated $1.9 billion in its asset base and charges 8 bps in fees per year. The product has a Zacks ETF Rank #3 (Hold) with a Medium risk outlook (read: 5 Cheap Dividend ETFs for an Uncertain Market).

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