A Bunch Of Top-Ranked Growth ETFs Hitting New Highs (Revised)

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Wall Street has been hitting a series of record highs this month on renewed optimism over speedy economic recovery from the pandemic-driven recession. A massive fiscal relief package, signs of a healing labor market, continued progress in more vaccines and a rapid vaccination rollout has rekindled investors’ appetite for riskier assets.

The weak jobs data last week bolstered the case for additional stimulus. Both the Senate and the House of Representatives has passed a budget resolution, allowing Congress to continue moving forward with its $1.9 trillion coronavirus stimulus bill. The package includes another round of $1,400 stimulus checks, hundreds of billions of dollars in state and local aid, and enhanced federal unemployment benefits. Per Treasury Secretary Janet Yellen, the U.S. could return to full employment by 2022 – or two to three years ahead of some current projections – if measures in Biden's $1.9 trillion coronavirus relief plan are enacted (read: Sector ETF Winners & Loser in Light of January Job Gains).

Additionally, upbeat earnings have been driving the stocks higher as stronger-than-expected results for the fourth quarter have led analysts’ to raise their estimates for the coming quarters. In fact, earnings growth for Q4 has turned modestly positive, following three-straight quarters of decline, thanks to impressive results from the tech sector leaders.

Moreover, the COVID-19 infections started to decline as new cases averaged just below 118,000 per day over the past week, marking a drop of 31% from the average two weeks earlier, according to New York Times data.

While every corner of the market are enjoying a solid ascent, growth investing has taken charge this month.

Why Growth?

Growth stocks refer to high-quality stocks that are likely to witness revenues and earnings increase at a faster rate than the industry average. These stocks harness their momentum in earnings to create a positive bias in the market, resulting in higher share prices. As such, growth funds tend to outperform during an uptrend. These stocks seem having more upside potential in the coming months, given a surging stock market and improving prospect of economic growth.

However, these funds offer exposure to stocks with growth characteristics that have comparatively higher P/B, P/S and P/E ratios and exhibit a higher degree of volatility especially compared to value stocks.

Given this, we have highlighted a number of growth ETFs that hit all-time highs in the last trading session and have AUM of $1 billion or more. Any of these could be excellent plays for investors seeking to ride out the bullish trend in the coming months as well given that these have a Zacks ETF Rank #1 (Strong Buy).

iShares Russell 1000 Growth ETF IWF

This ETF follows the Russell 1000 Growth Index and holds 453 stocks in its basket. It has AUM of $64.6 billion and charges 19 bps in annual fees.

iShares S&P 500 Growth ETF IVW

This fund tracks the S&P 500 Growth Index and holds 232 stocks in its basket. It charges 18 bps in annual fees and has amassed $32.5 billion in its asset base (read: 5 Stocks That Powers S&P 500 ETF Last Week).

Vanguard Small-Cap Growth ETF VBK

This ETF follows the CRSP US Small Cap Growth Index, holding 611 securities in its basket. It has amassed $15.5 billion in its asset base while charging 7 bps in fees per year.

iShares Russell Mid-Cap Growth ETF IWP

This ETF targets the mid-cap growth segment and tracks the Russell MidCap Growth Index. With AUM of $15.3 billion, it holds 347 securities in its basket and charges 24 bps in annual fees.

Schwab U.S. Large-Cap Growth ETF SCHG

With AUM of $13.8 billion, SCHG follows the Dow Jones U.S. Large-Cap Growth Total Stock Market Index. It holds 231 stocks in its basket and charges 4 bps in annual fees.

iShares Russell 2000 Growth ETF IWO

This fund tracks the Russell 2000 Growth Index, holding 1126 stocks with AUM of $12.7 billion. It charges 24 bps in annual fees from investors (read: 5 Best ETF Investing Ideas for 2021).

Vanguard Mid-Cap Growth ETF VOT

This fund follows the CRSP US Mid Cap Growth Index, holding 162 securities. It has managed nearly $10.4 billion in its asset base and charges 7 bps in annual fees.

Vanguard Mega Cap Growth ETF MGK

With AUM of $10.2 billion, this ETF offers diversified exposure to the largest growth stocks in the U.S. market by tracking the CRSP US Mega Cap Growth Index. It holds 100 securities in its basket and charges 7 bps in annual fees (read: U.S. Dollar Sees First Drop Since 2017: ETFs & Stocks to Buy).

iShares S&P Small-Cap 600 Growth ETF IJT

This ETF follows the S&P SmallCap 600 Growth Index and holds a well-diversified portfolio of 350 stocks. It has amassed $6.1 billion and charges 18 bps in annual fees.

(We are reissuing this article to correct a mistake. The original article, issued on February 10, 2021, should no longer be relied upon.)

Disclosure: Zacks.com contains statements and statistics that have been obtained from sources believed to be reliable but are not guaranteed as to accuracy or completeness. References to any ...

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