Growth stock exchange traded funds rallied Tuesday as continued upbeat quarterly earnings and stronger-than-anticipated retail sales data added to optimism over the upcoming holiday shopping season and eased fears of a tightening monetary policy.
Retail sales increased 1.7% in October, the largest rise since March and above the 1.4% estimate, showing that American consumers have already begun holiday shopping early to avoid a shortage of goods amid stretched supply chains, Reuters reports.
“This does give people a sigh of relief that the retail outlook is still pretty rosy,” Brian Jacobsen, senior investment strategist at Allspring Global Investments, told Reuters. “The outlook is one where prices are rising but consumer spending is still strong and it looks like the supply chains are stressed but still we’re able to get goods on the shelves.”
Another data report showed that U.S. manufacturing output rose to a two-and-a-half-year high in October.
The positive economic updates helped investors look past comments from St. Louis Federal Reserve President James Bullard, who took on a more hawkish stance for the central bank in light of rising inflationary pressures. The Fed has already started to taper its bond-purchasing program while the spike in inflation has added to concerns that the central bank could hike rates sooner, which would affect risk assets that have benefited from the stimulus.
Investors interested in the growth style can turn to targeted strategies like the American Century Focused Dynamic Growth ETF (FDG). FDG is a high-conviction strategy that invests in early-stage, rapid-growth companies with a competitive advantage and high profitability, growth, and scalability.
Additionally, investors can look to the American Century STOXX U.S. Quality Growth ETF (NYSEArca: QGRO). QGRO’s stock selection process is broken down into high-growth stocks based on sales, earnings, cash flow, and operating income, along with stable-growth stocks based on growth, profitability, and valuation metrics.
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