Why You Should Buy Growth ETFs & Stocks Now

After logging in the worst May since 2010, Wall Street staged a nice comeback at the start of June primarily on the hopes of monetary easing policies though the U.S.-China trade spat and global growth concerns linger.

Fed Chair Powell, who suspended the three-year monetary policy tightening program this year, last week signaled rate cuts if needed. The latest weak job data has stirred speculation on interest rate cuts. Lower rates would make borrowings cheaper, providing a boost to both investment in new projects and repayment of higher-rate debt. As such, it would lead to strong economic growth and is thus a boon for the stock market.

Additionally, the rally came after President Donald Trump suspended the planned tariffs against Mexico. A slew of mergers and acquisitions is also driving stocks higher this month.

Given the return of bullish trends, nothing seems a better strategy than growth. This is especially true, as growth stocks 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. As such, growth stocks tend to outperform during an uptrend.

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.

Given this, we have highlighted five growth ETFs and stocks that have a top Zacks Rank #1 (Strong Buy), suggesting their outperformance.

ETFs to Buy

These ETFs are popular in the growth space, making them extremely liquid.

Invesco QQQ (QQQ - Free Report)

This fund follows the Nasdaq-100 Index and holds a basket of 103 stocks.

AUM: $69.8 billion
Expense Ratio: 0.20%
Average Daily Volume: 41.1 million shares

iShares Russell 1000 Growth ETF (IWF - Free Report)

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