Should You Boost Your Allocation to Growth ETFs Now?

Core Insights - November has been a volatile month for the S&P 500, with the index down approximately 3.7%, causing investor uncertainty about the economy's near-term direction. However, upgraded growth forecasts from institutions, driven by strong earnings growth and productivity gains from AI adoption, suggest a more positive economic outlook [1][4][7] Economic Outlook - Rising expectations for a Federal Reserve rate cut in December, along with optimism for a rebound in the AI sector, contribute to an improving economic outlook [2][3] - Morgan Stanley projects the S&P 500 to reach 7,800 by the end of 2026, representing an increase of about 18.13% from current levels, supported by strong earnings growth and productivity boosts from AI [4] - UBS forecasts the S&P 500 to reach 7,500 by the end of next year, bolstered by strong corporate earnings and resilience in the tech sector [5] Market Activity - U.S. equity funds have seen inflows for five consecutive weeks, with a net inflow of $4.36 billion in the week ending November 19, nearly four times the previous week's inflow of approximately $965 million, as investors focus on strong third-quarter earnings [6] Investment Opportunities - Investors are encouraged to explore growth ETFs that offer exposure to high-growth potential stocks, particularly during market uptrends [8] - Several growth-focused ETFs are highlighted, including: - Vanguard Growth ETF (VUG) with an asset base of $196.85 billion, gaining 25.54% over the past year [9][10] - iShares Russell 1000 Growth ETF (IWF) with an asset base of $121.09 billion, gaining 25.30% over the past year [11][12] - iShares S&P 500 Growth ETF (IVW) with an asset base of $64.71 billion, gaining 26.67% over the past year [13][14] - SPDR Portfolio S&P 500 Growth ETF (SPYG) with an asset base of $43.67 billion, gaining 26.84% over the past year [14][15] - iShares Core S&P U.S. Growth ETF (IUSG) with an asset base of $25.25 billion, gaining 25.63% over the past year [16]