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7 Large-Cap Growth ETFs That Are Sizzling

Sanghamitra Saha

The global ransomware attack and a missile test by North Korea were overshadowed by the Saudi-Russia-led oil price jump. The result was a spike in the S&P 500, the Nasdaq composite, Dax and FTSE 100 Index to the record high on Monday (read: Cybersecurity ETFs Set to Rally After a Global Cyberattack).

The world's two top oil producers agreed to prolong their ongoing output cuts from the first half of 2017 to the end of the first quarter of 2018. United States Oil (USO) and United States Brent Oil BNO were up 2.2% and 2.1% on May 15, 2017, helped by the news (read: Saudi, Russia Boost Oil Price: Bet on Leveraged ETFs).

Plus, global mining companies have also gained considerably as China’s President Xi Jinping “over the weekend said there will be more than $100 billion in fresh financing to support its “One Belt, One Road” infrastructure program”, as per an article published on MarketWatch.

Things are shaping up even on the earnings front. For Q1, the S&P 500 is expected to log 12.7% earnings growth on 6.2% revenue growth, as per the Earnings Trends issued on May 10, 2017. The growth rates are pretty higher than what we saw in previous quarters (read: Ten Predictions for the ETF Industry in 2017).

The combination of these factors should continue to boost the stock market. Added to this, expectations of materialization of a corporate tax reform and fiscal reflation in the Trump administration may offer growth stocks an upside potential. This is especially true as growth investing is basically a momentum play and a great strategy in a trending market.

Why Large-Cap?

Having said this, while all sorts of growth ETFs may scale higher, large-caps are likely to enjoy some special benefit. Notably, the greenback has been a little subdued lately on weaker-than-expected retail sales and inflation reading. Overall, PowerShares DB US Dollar Bullish ETF UUP was down over 1.4% in the last one month (as of May 15, 2017).

Investors should note that large-cap stocks perform better in a falling dollar environment as these have wide foreign exposure. On the other hand, foreign economies are looking up lately, making the case for large-cap investing even stronger. Corporates have been strengthening not only in the U.S. but also in Europe and other so-long besieged regions, as perReuters (read: Face Off: Small Versus Large Cap ETFs).

As we all know, U.S. markets have been upbeat since Trump’s win on November 8 (barring some occasional falloffs). Growth stocks are likely to keep up the momentum as long as the Trump-mania continues.

Given this, several large-cap growth ETFs hit a 52-week high on May 15, 2017 and may continue to outperform ahead. Below we highlight a few of them.

Guggenheim S&P 500 Pure Growth ETF RPG

The underlying index of the fund – the S&P 500 Pure Growth Index – reflects those S&P 500 companies that have strong growth characteristics as selected by Standard & Poor’s. The fund charges 35 bps in fees.

Vanguard Growth ETF VUG

The fund looks to track the largest growth stocks of the U.S. It charges 6 bps in fees.

Vanguard Mega Cap Growth ETF MGK

The fund looks to track the largest growth stocks in the U.S. market. It charges 7 bps in fees.

iShares S&P 500 Growth IVW

The fund follows the S&P 500 Growth Index and tracks the performance of the large capitalization growth sector of the U.S. equity market. It charges 18 bps in fees.

iShares Core S&P US Growth IUSG

The fund gives exposure to an array of U.S. growth stocks. It charges 5 bps per year.

iShares Russell 1000 Growth IWF

The fund look to track U.S. companies whose earnings are expected to grow at an above-average rate relative to the market. The fund charges 20 bps in fees.

Schwab US Large-Cap Growth ETF SCHG

The fund gives exposure to the large-cap growth segment of the Dow Jones U.S. Total Stock Market Index. It charges 4 bps in fees.

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US BRENT OIL FD (BNO): ETF Research Reports
SCHWAB-US LCG (SCHG): ETF Research Reports
GUGG-SP 500 PG (RPG): ETF Research Reports
ISHARS-RS 1K GR (IWF): ETF Research Reports
ISHARS-SP500 GR (IVW): ETF Research Reports
ISHARS-CR USG (IUSG): ETF Research Reports
VIPERS-GROWTH (VUG): ETF Research Reports
VANGD-MG CAP GR (MGK): ETF Research Reports
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