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The current economic landscape can be a rewarding time to bet on growth-oriented names, as a supportive macro backdrop and the Fed’s rate cuts paint an optimistic picture for the U.S. economy, reinforcing growing confidence in the economy’s momentum.
Over the past year, the S&P 500 Growth Index has delivered a strong return of 26.32%, significantly outperforming the S&P 500 Value Index, which has gained 6.05%. The growth also outperformed the broader S&P 500, which advanced 16.9% during the same period.
The S&P 500 Growth Index started October on a strong footing, rising 1.55% month to date, similar when compared with the S&P 500 Value Index’s gain of 1.53%.
Softer U.S. inflation data, an upbeat earnings season and rising expectations for two more Fed rate cuts have together lifted market sentiment and fueled optimism among investors. Additionally, renewed hopes for a trade deal between Beijing and Washington have further strengthened the bull case.
Dovish Fed Outlook Fuels Market Momentum
Per the CME FedWatch tool, markets are anticipating a 96.7% likelihood of a rate cut in the recent October meeting. Markets also estimate a 100% likelihood of a rate cut in December, with a 95.7% probability that rates will fall to the 3.5%–3.75% range.
Solid Earnings Momentum Keeps Bulls in Control
According to LSEG, as quoted on CNBC, the earnings season has impressed so far, with 87% of companies beating Wall Street forecasts, well above the 67% average. If Big Tech delivers strong numbers and upbeat guidance this week, the rally could push markets to new highs.
Inflation Eases, Confidence Returns
The recent inflation report further reinforces market optimism fueled by a strong earnings season. According to another CNBC article, the Consumer Price Index (CPI), notably the only economic data released amid the ongoing government shutdown, climbed 0.3% in September, bringing the annual inflation rate to 3%, slightly below Dow Jones forecasts of 0.4% and 3.1%, respectively.
Hopes of Beijing–Washington Progress Brighten Outlook
An agreement between Beijing and Washington could help ease economic risks and geopolitical tensions, paving the way for improved market confidence and global stability. As President Trump and President Xi prepare for their meeting this Thursday, Trump indicated optimism that the United States and China would be able to strike a trade deal.
According to Dan Ives, as quoted in a CNBC article, a breakthrough in U.S.-China trade talks could give Big Tech stocks a strong tailwind and add fresh momentum to the broader market rally.
ETFs to Explore
Investors can also explore growth ETFs without the constraint of a low beta, taking on more risk to potentially benefit from a positive economic outlook. Growth funds typically excel during market uptrends, providing exposure to stocks with high growth potential.
Below, we have highlighted a few growth-focused funds that may appeal to investors.
Vanguard Growth ETF tracks the performance of CRSP US Large Cap Growth Index with a basket of 160 securities. The fund has amassed an asset base of $195.92 billion and charges an annual fee of 0.04%.
VUG presently sports a Zacks ETF Rank #1 (Strong Buy), with 62.08% allocated to technology, followed by 18.22% in consumer discretionary.
Vanguard Growth ETF has a one-month average trading volume of about 1.12 million shares. VUG has gained 9.57% over the past three months and 25.54% over the past year.
iShares Russell 1000 Growth ETF seeks to track the performance of the Russell 1000 Growth Index with a basket of 391 securities. The fund has amassed an asset base of $121.51 billion and charges an annual fee of 0.18%.
IWF presently sports a Zacks ETF Rank #1, with 25.99% allocated to information technology, followed by 12.81% in consumer discretionary and 11.46% in communication.
iShares Russell 1000 Growth ETF has a one-month average trading volume of about 1.39 million shares. IWF has gained 10.46% over the past three months and 25.30% over the past year.
iShares S&P 500 Growth ETF seeks to track the performance of the S&P 500 Growth Index with a basket of 216 securities. The fund has amassed an asset base of $65.49 billion and charges an annual fee of 0.18%.
IVW presently sports a Zacks ETF Rank #1, with 42.76% allocated to information technology, followed by 15.55% to communication and 11.99% to consumer discretionary.
iShares S&P 500 Growth ETF has a one-month average trading volume of about 2.06 million shares. IVW has gained 9.79% over the past three months and 26.84% over the past year.
SPDR Portfolio S&P 500 Growth ETF seeks to track the performance of S&P 500 Growth Index with a basket of 216 securities. The fund has amassed an asset base of $43.76 billion and charges an annual fee of 0.04%.
SPYG presently sports a Zacks ETF Rank #1, with 42.48% allocated to information technology, followed by 15.50% in communication services and 12.2% in consumer discretionary.
SPDR Portfolio S&P 500 Growth ETF has a one-month average trading volume of about 2.8 million shares. SPYG has gained 9.79% over the past three months and 26.84% over the past year.
iShares Core S&P U.S. Growth ETF seeks to track the performance of the S&P 900 Growth Index with a basket of 462 securities. The fund has amassed an asset base of $25.26 billion and charges an annual fee of 0.04%.
IUSG presently sports a Zacks ETF Rank #1, with 41.51% allocated to information technology, followed by 14.81% to communication and 12.04% to consumer discretionary.
iShares Core S&P U.S. Growth ETF has a one-month average trading volume of about 468,000 shares. IUSG has gained 9.58% over the past three months and 25.63% over the past year.
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Can Growth ETFs Power Ahead as Optimism Builds?
The current economic landscape can be a rewarding time to bet on growth-oriented names, as a supportive macro backdrop and the Fed’s rate cuts paint an optimistic picture for the U.S. economy, reinforcing growing confidence in the economy’s momentum.
Over the past year, the S&P 500 Growth Index has delivered a strong return of 26.32%, significantly outperforming the S&P 500 Value Index, which has gained 6.05%. The growth also outperformed the broader S&P 500, which advanced 16.9% during the same period.
The S&P 500 Growth Index started October on a strong footing, rising 1.55% month to date, similar when compared with the S&P 500 Value Index’s gain of 1.53%.
Softer U.S. inflation data, an upbeat earnings season and rising expectations for two more Fed rate cuts have together lifted market sentiment and fueled optimism among investors. Additionally, renewed hopes for a trade deal between Beijing and Washington have further strengthened the bull case.
Dovish Fed Outlook Fuels Market Momentum
Per the CME FedWatch tool, markets are anticipating a 96.7% likelihood of a rate cut in the recent October meeting. Markets also estimate a 100% likelihood of a rate cut in December, with a 95.7% probability that rates will fall to the 3.5%–3.75% range.
Solid Earnings Momentum Keeps Bulls in Control
According to LSEG, as quoted on CNBC, the earnings season has impressed so far, with 87% of companies beating Wall Street forecasts, well above the 67% average. If Big Tech delivers strong numbers and upbeat guidance this week, the rally could push markets to new highs.
Inflation Eases, Confidence Returns
The recent inflation report further reinforces market optimism fueled by a strong earnings season. According to another CNBC article, the Consumer Price Index (CPI), notably the only economic data released amid the ongoing government shutdown, climbed 0.3% in September, bringing the annual inflation rate to 3%, slightly below Dow Jones forecasts of 0.4% and 3.1%, respectively.
Hopes of Beijing–Washington Progress Brighten Outlook
An agreement between Beijing and Washington could help ease economic risks and geopolitical tensions, paving the way for improved market confidence and global stability. As President Trump and President Xi prepare for their meeting this Thursday, Trump indicated optimism that the United States and China would be able to strike a trade deal.
According to Dan Ives, as quoted in a CNBC article, a breakthrough in U.S.-China trade talks could give Big Tech stocks a strong tailwind and add fresh momentum to the broader market rally.
ETFs to Explore
Investors can also explore growth ETFs without the constraint of a low beta, taking on more risk to potentially benefit from a positive economic outlook. Growth funds typically excel during market uptrends, providing exposure to stocks with high growth potential.
Below, we have highlighted a few growth-focused funds that may appeal to investors.
Vanguard Growth ETF (VUG - Free Report)
Vanguard Growth ETF tracks the performance of CRSP US Large Cap Growth Index with a basket of 160 securities. The fund has amassed an asset base of $195.92 billion and charges an annual fee of 0.04%.
VUG presently sports a Zacks ETF Rank #1 (Strong Buy), with 62.08% allocated to technology, followed by 18.22% in consumer discretionary.
Vanguard Growth ETF has a one-month average trading volume of about 1.12 million shares. VUG has gained 9.57% over the past three months and 25.54% over the past year.
iShares Russell 1000 Growth ETF (IWF - Free Report)
iShares Russell 1000 Growth ETF seeks to track the performance of the Russell 1000 Growth Index with a basket of 391 securities. The fund has amassed an asset base of $121.51 billion and charges an annual fee of 0.18%.
IWF presently sports a Zacks ETF Rank #1, with 25.99% allocated to information technology, followed by 12.81% in consumer discretionary and 11.46% in communication.
iShares Russell 1000 Growth ETF has a one-month average trading volume of about 1.39 million shares. IWF has gained 10.46% over the past three months and 25.30% over the past year.
iShares S&P 500 Growth ETF (IVW - Free Report)
iShares S&P 500 Growth ETF seeks to track the performance of the S&P 500 Growth Index with a basket of 216 securities. The fund has amassed an asset base of $65.49 billion and charges an annual fee of 0.18%.
IVW presently sports a Zacks ETF Rank #1, with 42.76% allocated to information technology, followed by 15.55% to communication and 11.99% to consumer discretionary.
iShares S&P 500 Growth ETF has a one-month average trading volume of about 2.06 million shares. IVW has gained 9.79% over the past three months and 26.84% over the past year.
SPDR Portfolio S&P 500 Growth ETF (SPYG - Free Report)
SPDR Portfolio S&P 500 Growth ETF seeks to track the performance of S&P 500 Growth Index with a basket of 216 securities. The fund has amassed an asset base of $43.76 billion and charges an annual fee of 0.04%.
SPYG presently sports a Zacks ETF Rank #1, with 42.48% allocated to information technology, followed by 15.50% in communication services and 12.2% in consumer discretionary.
SPDR Portfolio S&P 500 Growth ETF has a one-month average trading volume of about 2.8 million shares. SPYG has gained 9.79% over the past three months and 26.84% over the past year.
iShares Core S&P U.S. Growth ETF (IUSG - Free Report)
iShares Core S&P U.S. Growth ETF seeks to track the performance of the S&P 900 Growth Index with a basket of 462 securities. The fund has amassed an asset base of $25.26 billion and charges an annual fee of 0.04%.
IUSG presently sports a Zacks ETF Rank #1, with 41.51% allocated to information technology, followed by 14.81% to communication and 12.04% to consumer discretionary.
iShares Core S&P U.S. Growth ETF has a one-month average trading volume of about 468,000 shares. IUSG has gained 9.58% over the past three months and 25.63% over the past year.