A Spread Of Growth ETFs At All-Time Highs

Growth investing has become hot lately with the Wall Street witnessing a remarkable rally. This is especially true as growth stocks are a momentum play and tend to outperform in a trending market (a market characterized by a prolonged uptrend). These refer to high-quality stocks that are likely to witness revenue 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 rocketing share prices.

Solid Market Trends

The three major indices have been hitting series of record highs lately with the S&P 500 crossing the 3,100 level for the first time ever early this week. The rally is mainly powered by the easing U.S.-China trade worries and stronger-than-expected earnings.

This is because the United States is expected to sign a phase one trade deal with China later this month. On the Q3 earnings front, of the 455 S&P members that reported results, 72.3% beat earnings estimates and 57.8% beat on revenues. The proportion of these companies beating earnings and revenue estimates is within the historical range.

The gains were also driven by rate cuts by the Federal Reserve, which made borrowings cheaper, providing a boost to both investment in new projects and repayment of higher-rate debt. The Fed slashed interest rates again by 25 basis points (bps) last month, marking the third rate cut for the year. A slew of mergers and acquisitions is also driving stocks higher.

ETFs to Play

Given the bullishness, investors seeking to capitalize on the strong trends should consider growth ETFs. However, it is worth noting that 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 when compared to value stocks.

Below, we have presented some ETFs that are scaling to all-time highs in the latest trading session. All these funds have a Zacks ETF Rank #1 (Strong Buy) or 2 (Buy).

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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 specific ...

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