4 Growth ETFs & Stocks To Bloom In Spring

As the spring season kicked off, economic activity across all the sectors are likely to step up, injecting fresh optimism in both business and consumer confidence.

The housing and transport sectors in particular gain momentum with demand building up over the frigid winter for new homes and transportation, which is a barometer of broad economic health. This spring, solid job gains, slowly rising wages, and higher spending power buoyed by cheap fuel will add to the strength. The combination of these factors will give a boost to the stock market, which saw a scary start to the year but made an impressive comeback over the past one month.

While value stocks have been gathering maximum attention this year, growth stocks have more upside potential in the coming month buoyed by spring fever. This is especially true as growth investing is basically a momentum play and a great strategy in a trending market (a market characterized by a prolonged uptrend).

Growth stocks refer to high-quality stocks that are likely to witness revenue and earnings increase 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. As such, growth stocks tend to outperform during an uptrend (read: Growth ETFs Regain Momentum: Will This Last?).

Given this, investors should recycle their portfolio into the growth space to obtain a nice momentum play. For them, we have presented four ETFs and stocks that are ready to bloom this spring.

ETFs Picks

Using our database, we have selected growth ETFs that provide exposure to the broad stock market instead of a particular sector and have a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold). This is because these ranks suggest strengthening fundamentals and superior weighting methodologies that could allow them to lead higher than their cousins in a booming market. Further, these funds have outperformed the broad market fund (SPY) by a wide margin over the past one year. Notably, SPY delivered returns of 0.82% in the same time period.
 
iShares Russell Top 200 Growth ETF (IWY – ETF report)

This fund offers exposure to the large-cap segment by tracking the Russell Top 200 Growth Index.