Growth stock exchange traded funds advanced on Thursday as big technology led the charge with traders eyeing quarterly earnings.
“The craziest thing about what I see going on in markets is just an absolute tug of war between growth and value investments,” Jeff Powell, managing partner and chief investment officer at Polaris Wealth Advisory Group, told the Wall Street Journal. “I’ve not seen a market like this in a really long time.”
The equity markets have rallied in recent sessions on strong quarterly earnings, which helped mitigate concerns like a weakening Chinese economy and supply chain problems that sent markets reeling last month. So far, corporate America has shown resilience despite labor shortages and supply issues as many have shifted the cost onto consumers.
“Coming out of the depressed period of Covid and turning everything back on you had this amazing year-over-year comparison that was really easy to accomplish,” Kevin Philip, managing director at Bel Air Investment Advisors, told the WSJ. “Now the question for a lot of people is… will the earnings after this big jump sustain themselves?”
Of the 80 companies on the S&P 500 that have reported as of Wednesday, 81% beat analysts’ earnings expectations, according to FactSet data, compared to the roughly 75% that did so each quarter in 2019.
“We’ve gone through a period of hesitation that’s brought a bit of volatility but I think stocks will keep trending higher,” Paul Jackson, head of asset allocation research at Invesco, told the WSJ.
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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