Predictions of an impending recession at the US stock market are gathering pace on Wall Street even as a series of economic indicators paint a contrasting picture. Data from the Labor Department, released in early April, reveals that the US economy added nearly half a million jobs in March as the unemployment rate dropped to a record low of 3.8%. Meanwhile, the Dow Jones Industrial Average, a price-weighted index that tracks the performance of 30 large-cap firms trading on US markets, is just 6% off a record high.
A report from Brookings Institution, an American research group, claims that households in the US accumulated nearly $2.5 trillion in excess savings during the pandemic. However, market experts are skeptical of the sustainability of this growth. Lawrence Summers, a former Treasury Secretary, recently authored an opinion piece in news publication The Washington Post in which he stressed that the economic conditions in the US were “undeniably reminiscent” of previous pre-recession periods in history.
Summers underlined that whenever inflation had exceeded 4% and the unemployment rate had gone below 5%, the US economy, over the past seventy-five years, had always shrunk into a recession within two years. Data from the Bureau of Labor Statistics indicates that inflation is nearly touching 8% while the unemployment rate has dropped down to around 3.6%. Per the former official, there was an 80% chance of a recession in the US. The concerns around such a market slowdown have resulted in a mass exodus from growth stocks towards value plays.
One key factor which could play a decisive role in this game is the policies of the Fed if the rise in interest rates continues to slow down the economy. In such a scenario, investors could look towards growth stocks for profit keeping the broader economic situation in mind. Esty Dwek, the chief investment officer at FlowBank, told news agency Reuters recently that as fears of the recession grow, there was going to be a “big shift away from value stocks”. FlowBank is one of the investment firms doubling down on their growth bets during this lean period.
Investors who want to prepare their portfolios for the upcoming market volatility should consider investing in some growth exchange-traded funds that offer a lot of benefits that growth equities offer but also lower the overall risk associated with some of these equities. Some of the top holdings of retirement ETFs popular in the US include Tesla, Inc. (NASDAQ:TSLA), Apple Inc. (NASDAQ:AAPL), and Microsoft Corporation (NASDAQ:MSFT), among others discussed in detail below.
The ETFs listed below are discussed with regards to their top holdings. The aim of the article is to provide readers with a basic rundown of some of the top growth ETFs in the US. All the ETFs listed below trade on exchanges in the United States.
Growth ETFs to Buy Now
10. Invesco QQQ Trust (NASDAQ:QQQ)
Invesco QQQ Trust (NASDAQ:QQQ) is a fund that tracks the performance of the NASDAQ-100 Index. The index comprises 100 of the biggest non-financial companies trading on exchanges in the United States. The securities in the fund are held in the almost same proportion as their weighting on the index.
One of the biggest holdings of Invesco QQQ Trust (NASDAQ:QQQ) is Meta Platforms, Inc. (NASDAQ:FB), a diversified technology company. At the end of the fourth quarter of 2021, 224 hedge funds in the database of Insider Monkey held stakes worth $31.8 billion in Meta Platforms, Inc. (NASDAQ:FB), compared to 248 in the preceding quarter worth $38.5 billion.
Just like Tesla, Inc. (NASDAQ:TSLA), Apple Inc. (NASDAQ:AAPL), and Microsoft Corporation (NASDAQ:MSFT), Meta Platforms, Inc. (NASDAQ:FB) is one of the growth stocks on the radar of elite investors.
In its Q4 2021 investor letter, Boyar Value Group, an asset management firm, highlighted a few stocks and Meta Platforms, Inc. (NASDAQ:FB) was one of them. Here is what the fund said:
“Corporate executives can have many different reasons for selling shares (anticipation of tax law changes, philanthropy, diversification, and much more), but the sheer number of billionaire founders who sold shares in 2021 should raise eyebrows and might well be signaling a market top. Bloomberg’s Ben Steverman and Scott Carpenter report not only that Mark Zuckerberg of Meta Platforms, Inc. (NASDAQ:FB) (formerly known as Facebook) sold shares in his company almost every day last year but also that the founders of Google sold ~$3.5 billion worth of stock (the first time either Sergey Brin or Larry Page has sold shares since 2017).”
9. Vanguard Growth Index Fund (NYSE:VUG)
Vanguard Growth Index Fund (NYSE:VUG) is an exchange traded fund that invests in sectors which tend to grow more quickly than the broader market. The fund focuses on large-cap growth stocks that may underperform the market in the short-term.
A premier holding of Vanguard Growth Index Fund (NYSE:VUG) is…