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Mega Cap Growth ETF (MGK) Hits New 52-Week High

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For investors seeking momentum, Vanguard Mega Cap Growth ETF (MGK - Free Report) is probably on radar now. The fund just hit a 52-week high and is up about 31.3% from its 52-week low price of $99.51/share.

But are more gains in store for this ETF? Let’s take a quick look at the fund and the near-term outlook on it to get a better idea on where it might be headed:

MGK in Focus

This ETF offers diversified exposure to the largest growth stocks in the U.S. market. It holds 121 securities in its basket with key holdings in information technology, consumer services, industrials and financials. It charges 7 basis points in annual fees (see: all the Large Cap Growth ETFs here).

Why the Move?

The growth space of the broad U.S. stock market has been an area to watch lately given that better-than-expected earnings led to a new all-time high for the S&P 500. Investors are feeling optimistic about the global economy given signs of improving growth in China with new measures and reforms, as well as steady albeit slowing growth in the U.S. economy. The Fed’s decision of not raising interest rates this year after seven hikes over the past two years also bolstered investors’ sentiment. Further, an oil price surge and bouts of upbeat data globally are providing strong support to the bulls. In such a scenario, growth stocks tend to outperform during an uptrend.

More Gains Ahead?

Currently, MGK has a Zacks ETF Rank #1 (Strong Buy) with a Medium risk outlook, suggesting that the outperformance could continue in the months ahead. Further, many of the segments that make up this ETF have a strong Zacks Industry Rank, so there is definitely still some promise for those who want to ride on this surging ETF a little longer.

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