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Is Turning to Growth ETFs a Smart Move Now?
ZACKSยท2025-09-05 17:06

Market Performance - The S&P 500 has risen approximately 11% year to date and nearly 30% since early April, with a 4.2% increase in August and continued momentum into September, indicating a favorable environment for growth-oriented funds [1] - The S&P 500 Growth Index has delivered a strong return of 28.8% over the past year, significantly outperforming the S&P 500 Value Index, which gained 4.97% [2] - The S&P 500 reached a new record high, marking its 21st record close of the year, driven by the increasing likelihood of an interest rate cut by the Fed [3] Economic Indicators - Markets anticipate a 99.7% likelihood of a rate cut in September, 99.8% in October, and a 100% probability in December, according to the CME FedWatch tool [4] - August's ISM Non-Manufacturing PMI registered at 52.0, exceeding expectations and indicating continued growth in the services sector, which plays a crucial role in overall economic growth [6] Analyst Forecasts - HSBC raised its forecast for the S&P 500 to 6,500 from 6,400 for the end of 2025, supported by robust second-quarter earnings and modest tariff impacts, with other major brokerages also setting their year-end target at 6,500 [5] Investment Opportunities - Several growth-focused ETFs are highlighted for potential investment, including: - Vanguard Growth ETF (VUG) with an asset base of $184.99 billion, an annual fee of 0.04%, and a 3.76% gain over the past month [8][9] - iShares Russell 1000 Growth ETF (IWF) with an asset base of $115.53 billion, an annual fee of 0.18%, and a 3.76% gain over the past month [10][11] - iShares S&P 500 Growth ETF (IVW) with an asset base of $62.56 billion, an annual fee of 0.18%, and a 3.41% gain over the past month [12][13] - SPDR Portfolio S&P 500 Growth ETF (SPYG) with an asset base of $39.92 billion, an annual fee of 0.04%, and a 3.42% gain over the past month [14][15] - iShares Core S&P U.S. Growth ETF (IUSG) with an asset base of $24.22 billion, an annual fee of 0.04%, and a 3.36% gain over the past month [16][17]