5 Top-Ranked Growth ETFs & Stocks To Tap Post Mid-Term Rally

The mid-term election outcome has sparked a rally in the stock market. Democrats won the House of Representatives as expected while the Republicans maintained control of the Senate. This has resulted in a split Congress with a Republican president.

In fact, both the Dow Jones and the S&P 500 logged in the biggest post-midterms gain since 1982. The trend is likely to continue as a gridlock is good for stocks. A divided government will keep the rates in check resulting in higher prices for stocks. Additionally, the outcome eased fears of a big change in policy that could hurt corporate profitability.

According to data from LPL Financial, stocks usually see a 15.7% gain in the year after mid-term election that produce a split Congress under a Republican president. Not only do stocks usually see that longer runway of growth after such an outcome but it tends to start with a quick bounce.

Given the historical bullish trend post mid-term election, 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 solid Zacks Rank #1 (Strong Buy) or #2 (Buy), suggesting their outperformance in the months ahead.

ETFs to Buy

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

iShares Russell 1000 Growth ETF (IWF - Free Report)

This ETF follows the Russell 1000 Growth Index and holds 545 stocks in its basket.

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