An ETF That Captures the Growth of Large U.S. Multinationals

The second quarter earnings season revealed a number of large-cap U.S. companies with big international footprints generated higher earnings growth. Exchange traded fund investors can also capitalize on this trend through a targeted smart beta strategy.

The global economy is picking up pace, supporting the outlook for U.S. multinational companies.

“Signs of enhanced momentum in the global economy have recently emerged. Global GDP growth has picked up to an annualised rate of over 3¼ percent since the middle of 2016, with a rebound in industrial production, global trade and investment,” according to the OECD Global Economic Outlook.

Companies in the S&P 500 with higher global exposure were expected to benefit from a weaker U.S. dollar and higher global GDP growth, writes John Butters, Senior Earnings Analyst for FactSet. With 90% of S&P 500 companies reporting earnings, those that have a higher global revenue exposure outperformed S&P 500 companies with lower global revenue in terms of earnings growth and sales growth for the second quarter.