The S&P 500 breaks the 3,000 level for the first time ever after the Fed indicated easy money policies in the cards. Fed Chair Jerome Powell stated that slower business investments across the United States and lingering global growth uncertainties might slowdown the domestic growth, thereby bolstering the outlook for a near-term rate cut. The index has risen 1,000 points in the last five years prior to which it reached 2,000 on Aug 26, 2014.
With this, the S&P 500 has increased 19.5% so far this year. Most of this rally was driven by the dual tailwinds of hopes of easing monetary policies and trade optimism. A slew of mergers & acquisitions and the rising oil price also added to this upside. The trend is likely to continue though bouts of volatility and instability kept crossing the bulls (read: 5 Unbeatable ETF Strategies for 2nd Half).
The proxy version, SPDR S&P 500 ETF Trust (SPY - Free Report) , which tracks the S&P 500 Index has gained 20.6% so far this year. Let’s take a closer look at the fundamentals of SPY and the stocks behind this rally:
Inside The SPY
The ETF holds 504 stocks in its basket with each security holding not more than 4.23%. This suggests a nice balance across each security and prevents heavy concentration. The fund is widely spread across sectors with information technology, healthcare, financials and consumer discretionary being the top four with a double-digit allocation each. It has AUM of $276.4 billion and charges 9 bps in fees per year from investors. It trades in heavy volume of around 73.4 million shares a day on average, ensuring higher liquidity with a tight bid/ask spread, leading to lower trading costs for investors (read: First-Half 2019 ETF Asset Flow Roundup).
SPY has a Zacks ETF Rank #2 (Buy) with a Medium risk outlook. Though most stocks in the fund’s portfolio have delivered astounding returns in the year-to-date time frame, a few were the real stars, skyrocketing more than 60%. Below, we have highlighted the 10 best-performing stocks in the ETF so far this year:
Best-Performing Stocks of SPY
Advanced Micro Devices Inc. (AMD - Free Report) : The provider of microprocessors and servers with a Zacks Rank #3 (Hold) surged 83% and has a massive earnings growth rate of 45.65% for this year. Additionally, the stock belongs to a top-ranked Zacks industry (top 26%).
Xerox Corporation (XRX - Free Report) : This globally leading enterprise for business process and document management jumped 79.6% and belongs to a top-ranked Zacks industry (top 42%). The company is expected to see earnings growth of 12.43% for this year and has a Zacks Rank of 3 (read: 5 ETF Strategies to Win in a Pricey Market).
Cadence Design Systems Inc. (CDNS - Free Report) : This Zacks #3 Ranked company is the largest supplier of electronic design technologies, methodology services and design services. It soared 72.7% and has an earnings growth rate of 12.3% for this year. The stock belongs to a top-ranked Zacks industry (top 39%).
Coty Inc. (COTY - Free Report) : This beauty product company has been up 72.3% and has an earnings growth rate projection of 8.26% for fiscal (ending June 2020). It belongs to a top-ranked Zacks industry (top 24%).
Chipotle Mexican Grill Inc. (CMG - Free Report) : This restaurant has gained 72.1% so far this year and boasts an impressive earnings growth expectation of 43.6% for this year. It falls under the top-ranked Zacks industry (top 33%) and sports a solid Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
MarketAxess Holdings Inc. (MKTX - Free Report) : It is the operator of one of the leading platforms for the electronic trading of corporate bonds and certain other types of fixed-income securities. The stock has been up 65.3% so far this year and has a Zacks Rank #2 (Buy). Its earnings are expected to grow 14.4% this year and MarketAxess falls under a top-ranked Zacks industry (top 14%) (see: all the Large Cap ETFs here).
Synopsys Inc. (SNPS - Free Report) : This #3 Ranked player is the world's 15th largest software company and has gained 63.3% in the same time frame. The company looks to generate 11.5% in earnings growth for fiscal (ending Oct 2019). It is part of a top-ranked Zacks industry (top 39%).
DISH Network Corporation (DISH - Free Report) : This Zacks Rank #3 cable television company delivered returns of 62.8% in the year-to-date time frame and falls under a top-ranked Zacks industry (top 35%). Its earnings are expected to decline 18.7% for this year.
Total System Services Inc. (TSS - Free Report) : This Zacks Rank #3 global payments provider has surged about 62.4%. It has an earnings growth rate of 8.72% for this year and belongs to a top-ranked Zacks industry (top 31%).
Anadarko Petroleum Corporation (APC - Free Report) : Shares of APC have bumped up 62.3% so far this year. The stock carries a Zacks Rank of 3 and belongs to a top-ranked Zacks industry (top 36%). It has an estimated earnings growth rate of 8.8% for this year (read: OPEC Output Cut Extended to 2020: Will These ETFs Gain?).
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