3 ETFs To Buy As The S&P 500 Breaks Out To New Highs

The POWR Ratings also evaluates ETFs by component grades including Trade, Buy & Hold, Peer, and Category. To see more, click here.

Invesco QQQ Trust (QQQ)

QQQ had been the leading major index during the previous bull market from 2009 to 2020, and it was the leader during the initial months of the recovery that started in March 2020.

When looking at the QQQ, the most important aspect is the mega-cap tech stocks such as Amazon (AMZN), Apple (AAPL), Facebook (FB), and Google (GOOGL) which comprise a large weight in this portfolio. These stocks have been mostly range-bound since the summer, however, they have continued to deliver strong earnings reports, leading to attractive valuations particularly from a PEG perspective. 

Semiconductors are another important indication as they tend to be forward indicators of tech demand and spending. This sector is quite strong as well with a handful of names breaking out to new highs this week amid a supply crunch and strong demand. 

Many of the newer, emerging technologies like AI, machine learning, VR, and autonomous vehicles will lead to even higher demand in the coming years. Thus, many analysts believe that semiconductors will remain in a secular uptrend over the next demand and remain disconnected from the economic cycle.

This combination of strength in semiconductors and a healthy consolidation in mega-cap tech stocks, while earnings continue to compound, underpin the bull thesis for QQQ.

QQQ is rated a Strong Buy according to the POWR Ratings. This isn’t surprising given the high-quality companies in the market that are above average in terms of growth and value. To see more about QQQ’s component grades, click here.

Health Care Select Sector SPDR Fund (XLV)

Ben Franklin famously said that the only certainties in life are death and taxes. Well, we can now add increasing healthcare spending to that list. Over the last 50 years in the US, healthcare spending has increased from $75 billion to $3.3 trillion. As a share of GDP, it’s grown from 6.9% to 17% of GDP.

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