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Growth Investing Leads in 1H: 5 Top ETFs & Stocks

Sweta Killa
·5 min read

The first half of 2020 was marked by huge volatility mainly triggered by the COVID-19 outbreak, which had pushed the U.S. stock market into a bear territory in late March. However, the stocks staged an impressive comeback from the lows with the Nasdaq Composite Index hitting new highs lately though the S&P 500 and Dow Jones are still in red from a year-to-date look (read: Nasdaq Continues to Excel : 5 Best Stocks in ETF).  

A booming technology sector, an unprecedented stimulus from the central bank and the government, and hopes of a potential coronavirus vaccine were the biggest catalysts in driving the stocks higher. Additionally, the latest bouts of data indicate that the economy has been recovering faster than expected from the COVID-19 pandemic.

Though the rally has not been broad-based, growth investing took a lead courtesy of massive money flowing into the economy. This is especially true as the ultra-popular iShares Russell 1000 Growth ETF IWF has gained 10.6% so far this year against a loss of 15.2% for its value counterpart iShares Russell 1000 Value ETF IWD.

Growth stocks refer to high-quality stocks that are likely to witness revenue and earnings increasing 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. 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 the five best ETFs & stocks from this corner of the market that have outperformed so far this year. These funds have a solid Zacks ETF Rank #1 (Strong Buy), or 2 (Buy) indicating their outperformance in the coming months if bull trend continues.

Best ETFs

Vanguard Mega Cap Growth ETF MGK


This ETF offers diversified exposure to the largest growth stocks in the U.S. market by tracking the CRSP US Mega Cap Growth Index.

Zacks ETF Rank: #1
AUM: $7.8 billion
Expense Ratio: 0.07%
Average Daily Volume: 471,000 shares
YTD Returns: 13.7%

iShares Morningstar Large-Cap Growth ETF JKE

This fund targets large U.S. companies that are expected to see earnings growth at an above-average rate relative to the market. It follows the Morningstar Large Growth Index (read: U.S. Outperforms YTD: 6 Top-Ranked ETF Winners).

Zacks ETF Rank: #1
AUM: $1.7 billion
Expense Ratio: 0.25%
Average Daily Volume: 66,000 shares
YTD Returns: 13%

Vanguard Growth ETF VUG

This product tracks the performance of the CRSP US Large Cap Growth Index.

Zacks ETF Rank: #1
AUM: $56.4 billion
Expense Ratio: 0.04%
Average Daily Volume: 1.4 million shares
YTD Returns: 12.3%

iShares Russell Top 200 Growth ETF IWY

This fund follows the Russell Top 200 Growth Index.

Zacks ETF Rank: #1
AUM: $2.6 billion
Expense Ratio: 0.20%
Average Daily Volume: 190,000 shares
YTD Returns: 12%

iShares Morningstar Mid-Cap Growth ETF JKH

This ETF tracks the Morningstar Mid Growth Index.

Zacks ETF Rank: #2
AUM: $793.2 million
Expense Ratio: 0.30%
Average Daily Volume: 30,000 shares
YTD Returns: 11.9%

Best Stocks

Novavax Inc. NVAX


This specialty biopharmaceutical company is engaged in the research, development and commercialization of proprietary products focused on women's health and infectious diseases (read: Biotech ETFs Soaring on COVID-19 Vaccine Progress).

Zacks Rank: #2
Growth Score: B
Market Cap: $3.8 billion
This Year Estimated Earnings Growth: 14.14%
YTD Returns: 1650.2%

Adaptimmune Therapeutics PLC ADAP

This biopharmaceutical company is focused on cancer immunotherapy products based on T-cell receptor platform.

Zacks Rank: #2
Growth Score: A
Market Cap: $1.2 billion
This Year Estimated Earnings Growth: 26.5%
YTD Returns: 702.4%

Veritone Inc. VERI

This company provides artificial intelligence and computing solutions in the United States and the United Kingdom (read: 5 Niche Tech ETFs That Have Gained More Than 30% in 1H).

Zacks Rank: #2
Growth Score: A
Market Cap: $499.2 million
This Year Estimated Earnings Growth: 42.8%
YTD Returns: 599.2%

Nautilus Group Inc. The NLS

It is an iconic industry leader with a rich history and reputation for building the best cardio and strength equipment for home use.

Zacks Rank: #2
Growth Score: A
Market Cap: $$249.3 million
This Year Estimated Earnings Growth: 98.5%
YTD Returns: 387.4%

IZEA Worldwide Inc. IZEA

This company creates and operates online marketplaces that connect marketers and content creators.

Zacks Rank: #2
Growth Score: B
Market Cap: $46 million
This Year Estimated Earnings Growth: 14.14%
YTD Returns: 72.4%

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Novavax, Inc. (NVAX) : Free Stock Analysis Report
 
Nautilus Group, Inc. The (NLS) : Free Stock Analysis Report
 
iShares Russell 1000 Value ETF (IWD): ETF Research Reports
 
Adaptimmune Therapeutics PLC (ADAP) : Free Stock Analysis Report
 
IZEA WORLDWIDE, INC. (IZEA) : Free Stock Analysis Report
 
Vanguard Growth ETF (VUG): ETF Research Reports
 
iShares Morningstar LargeCap Growth ETF (JKE): ETF Research Reports
 
iShares Russell 1000 Growth ETF (IWF): ETF Research Reports
 
Vanguard Mega Cap Growth ETF (MGK): ETF Research Reports
 
iShares Russell Top 200 Growth ETF (IWY): ETF Research Reports
 
Veritone, Inc. (VERI) : Free Stock Analysis Report
 
iShares Morningstar MidCap Growth ETF (JKH): ETF Research Reports
 
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