5 Top-Performing Stocks Driving S&P 500 ETF Higher

After weeks of shaky trading, the Wall Street continued its second-largest bull run, dodging the list of woes including geopolitical tension, Washington turmoil, elevated valuations, the aftermath of hurricanes Harvey & Irma as well as rounds of downbeat economic data.

In particular, the S&P 500 is in the spotlight, with the index breaching the 2,500 milestone for the first time, bringing its year-to-date gains to nearly 12%. According to Bloomberg, this rally overtook the 266% increase in the index during the 1949-56 bull run and added almost $20 trillion to the value of American equities. The journey of 100 points came in less than four months, suggesting strong complacency in the stock market.


Renewed hopes for Trump’s tax reform by the end of the year is the main catalyst in driving the stock market to new highs. Additionally, steady economic fundamentals and strong corporate earnings added to the strength. The upward trend is likely to continue in the months ahead.

Given the enthusiasm, investors are flocking to its ETF, iShares Core S&P 500 ETF (IVV - Free Report) . Let’s take a closer look at the fundamentals of IVV and its performance.

IVV in Focus

IVV is the top asset creator this year pulling in nearly $24.1 billion in capital. It tracks the S&P 500 Index and holds 505 stocks in its basket, with each security holding no more than 3.85% of total assets. This suggests a nice balance across each security and prevents heavy concentration. However, the product is slightly tilted toward information technology sector with 23.1% share while health care, financials, consumer discretionary and industrials account for a double-digit exposure each. The ETF is the low cost choice in the space, charging 4 bps in fees per year from investors and trades in solid volume of 3.4 million shares a day on average.

The fund has gained 13.1% in the year-to-date time frame and has a Zacks ETF Rank #2 (Buy) with a Medium risk outlook. Though most of the stocks in the fund’s portfolio have delivered impressive returns, a few were the real stars gaining more than 60%.

Below, we have highlighted the five best-performing stocks in the ETF with their respective positions in the fund’s basket:

Best Performing Stocks of IVV

Vertex Pharmaceuticals (VRTX - Free Report) : The stock has surged 108.5% so far this year and carries a Zacks Rank #3 (Hold) with a VGM Style Score of A. The company has seen positive earnings estimate revision of eight cents for this year over the past three months with an expected earnings growth rate of 95.19% compared with the industry average of 5.69%. The stock has a solid Zacks Industry Rank in the top 36% and accounts for just 0.2% share in IVV.

Align Technology Inc. (ALGN - Free Report) : This stock makes up for 0.06% allocation in the fund’s basket and has delivered incredible returns of 91.9% so far this year. The stock has seen solid earnings estimate revision of 13 cents over the past three months for this year, reflecting year-over-year earnings growth of 41.16%, much higher than the industry average growth of 9.83%. Further, Align Technology has a Zacks Rank #3 with a VGM Style Score of C and has a dismal Zacks Industry Rank in the bottom 34%.

NRG Energy Inc. (NRG - Free Report) : The stock has gained about 87% in the year-to-date time frame. Though NRG has seen positive earnings estimate revision of six cents over the past three months for this year, its earnings are expected to decline 53.59% annually compared with the industry’s average growth of 6.19%. NRG Energy currently has a Zacks Rank #2 with a VGM Style Score of B. The stock has an ugly Zacks Industry Rank in the bottom 39% and makes up for 0.03% share in IVV.

Activision Blizzard Inc (ATVI - Free Report) : This stock has surged 80% so far this year and has 0.23% exposure in the fund’s basket. Though it has seen solid earnings estimate revision of 10 cents over the past three months for this year, its earnings are expected to decline 3.50% year over year compared with the industry’s average growth of 18.26%. Activision Blizzard has a Zacks Rank #1 (Strong Buy) with a VGM Style Score of D and belongs to solid Zacks Industry Rank in the top 14%.

Centene Corporation (CNC - Free Report) : This stock accounts for 0.08% of assets in the fund’s basket. It has gained 69.8% in the year-to-date time frame and has seen solid earnings estimate revision of 16 cents over the past three months for this year. However, its earnings are expected to grow 11.04%, well below the industry average of 18.89%. Centene Corporation has a Zacks Rank #2 with a VGM Style Score of A. It belongs a robust Zacks Industry Rank in the top 6%.

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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