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Mega Cap ETF (XLG) Hits New 52-Week High

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For investors seeking momentum, Invesco S&P 500 Top 50 ETF XLG is probably on the radar now. The fund just hit a 52-week high, and is up roughly 27.8% from its 52-week low price of $191.89/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:

XLG in Focus    

This fund offers exposure to mega cap securities with key holdings in information technology, communication services and healthcare. However, it is concentrated on the top two firms - Microsoft (MSFT - Free Report) and Apple AAPL - with more than 9% share each while other firms hold less than 6.1% of assets. The product charges investors 20 basis points in fees (see: all the Large Cap ETF Blend here).

Why the Move?

The mega cap space of the broad U.S. stock market has been an area to watch lately given the rebound in investors’ sentiment. Wall Street recorded its best week in eight months, countering the earlier losses from worries over the impact of coronavirus on the economy. This was especially because of China stimulus measures, slew of upbeat economic data and better-than-expected earnings. Notably, the S&P 500 and Dow Jones notched their biggest weekly gains since June, having climbed 3.2% and 3%, respectively.

More Gains Ahead?

Currently, XLG has a Zacks ETF Rank #2 (Buy) with a Medium risk outlook, suggesting continued outperformance in the months ahead. Further, many of the segments that make up this ETF have a strong Zacks Industry Rank. So, there is definitely some promise for those who want to ride this surging ETF a little further.

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