Best Growth ETFs For July

Investing

It has only been four months since March’s record-breaking losses, but market aggregates have already recovered to the pre-COVID levels of December 2019. It’s unclear, however, whether this indicates excessive pessimism in March, or whether the market is currently “irrationally exuberant” about an economy that still faces significant hardships. This article presents a list of growth ETFs curated by our deep learning systems paired with our Artificial Intelligence (“AI”), and examines their recent fund flows.

Invesco S&P 500 Pure Growth ETF (RPG)

First on our list of potential buys is “Attractive” rated Invesco S&P 500 Pure Growth ETF (RPG). The fund took a -$193 million outflow over the past 90 days, with over half of that in the last 30 days. A relatively high net expense ratio of 0.35% trades off against a healthy $2.2 billion under management, for decent fundamentals. At just under $133, the fund is within striking distance of its 52-week high of $136.48.

  

iShares Morningstar Large-Cap Growth ETF (JKE)

Next up on the “Attractive” list is the iShares Morningstar Large-Cap Growth ETF (JKE). The fund has not seen any new money in the last week, but gained $214 million over the past 90 days, which signifies significant investor attention. At only a $1.6 billion AUM and a 0.25% NER, however, our AI models suggest the fund has room to grow.

Vanguard S&P 500 Growth ETF (VOOG)

Our AI systems and deep learning algorithms have one last “Attractive” rated growth ETF in the Vanguard S&P 500 Growth ETF (VOOG.) At $3.6 billion AUM and 0.15% net expense, this fund leads on several metrics. And despite a -$9 million outflow in the last week, the fund gained $80 million in new money over the past 90 days, suggesting favorability with investors during adverse economic conditions.

SPDR S&P 600 Small Cap Growth ETF (SLYG)

For those betting against the market, our AI systems have identified SPDR S&P 600 Small Cap Growth ETF (SLYG) as this week’s “Top Short” ETF. Investor flows have been consistently negative, with -$24 million over the past week, and -$116 million over the last 3 months, but the fund is already trading at around 85% of its pre-crash price. The NER is 0.15% (the same as the Vanguard S&P 500 Growth ETF), which could be relatively high for uneven performance. Small caps could continue to have more pressure surviving the global pandemic, which makes this ETF one to bet against.

iShares Russell 2000 Growth ETF (), iSares S&P Small-Cap 600 Growth ETF (IJT), Schwab US Large-Cap Growth ETF (SCHG), iShares S&P Mid-Cap 400 Growth ETF (IJK), and Vanguard Mid-Cap Growth ETF (VOT)

Our AI models identified several ETFs as “Unattractive,” including the iShares Russell 2000 Growth ETF (IWO), the iShares S&P Small-Cap 600 Growth ETF (IJT), the Schwab US Large-Cap Growth ETF (SCHG), the iShares S&P Mid-Cap 400 Growth ETF (IJK), and the Vanguard Mid-Cap Growth ETF (VOT). There’s no clear trend in fund flows, as over the past 90 days, they were -$552 million, -$99 million, $719 million, -$324 million, and $212 million, respectively, and yet all of these funds have relatively high expense ratios at 0.24%, 0.25%, 0.04%, 0.25%, 0.07%. This may have factored into the rating.

SPDR S&P 400 Mid CapGrowth ETF (MDYG), iShares Russell 1000 Growth ETF (IWF), iShares Russell Top 200 Growth ETF (IWY), iShares Core S&P US Growth ETF (IUSG) iShares S&P 500 Growth ETF (IVW), Vanguard Growth ETF (VUG), Vanguard Mega Cap Growth ETF (MGK), Vanguard Russell 1000 Growth ETF (VONG), and Vanguard Small-Cap Growth ETF (VBK)

Our model was “Neutral” about most the of ETFs in our list, including the SPDR S&P 400 Mid Cap Growth ETF (MDYG), the iShares Russell 1000 Growth ETF (IWF), the iShares Russell Top 200 Growth ETF (IWY), the iShares Core S&P US Growth ETF (IUSG), the iShares S&P 500 Growth ETF (IVW), the Vanguard Growth ETF (VUG), the Vanguard Mega Cap Growth ETF (MGK), the Vanguard Russell 1000 Growth ETF (VONG), and Vanguard Small-Cap Growth ETF (VBK.) All these funds have seen net inflows over the past 90 days, with some, like the Vanguard Mega Cap Growth ETF (MGK) and the Vanguard Growth ETF (VUG), posting over $1 billion in new AUM. Yet others like the Vanguard Growth ETF (VUG), the iShares Russell 1000 Growth ETF (IWF), and the iShares S&P 500 Growth ETF (IVW) have seen sharp investor flights in the past week at -$213 million, -$67 million and -$175 million, respectively. This is suggesting a lack of investor confidence which could exacerbate the next market correction. The expense ratios in this category range from the low end, like Vanguard Growth ETF (VUG), at 0.04%, to relatively expensive like the iShares Russell 1000 Growth ETF (IWF) and iShares Russell Top 200 Growth ETF (IWY), which each cost 0.2%. Those higher NERs may have factored into the rating to drop into the “Neutral” territory.

Invesco S&P MidCap 400 Pure Growth ETF (RFG), and Invesco S&P SmallCap 600 Pure Growth ETF (RZG)

Finally, there were two unrated ETFs in our growth universe with the Invesco S&P MidCap 400 Pure Growth ETF (RFG) and the Invesco S&P SmallCap 600 Pure Growth ETF (RZG) having each seen no action in the past week. In addition, both have not had any new money over the past 90 days, with the former losing -$37 million, and the latter -$21 million. At net expense ratios of 0.35%, these are much more expensive than some of the superior options mentioned above.

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