Displaying items by tag: Growth

Growth ETFs offer a simplified way to invest in high-potential stocks without the time-consuming analysis required for picking individual winners. Key factors to consider when choosing a growth ETF include its long-term performance, sector diversification, expense ratio, and top holdings. 

The best ETFs typically maintain strong five- and ten-year returns, low costs, and broad exposure to tech-heavy but diversified portfolios. Notable examples include the iShares Russell Top 200 Growth ETF (IWY), Schwab U.S. Large-Cap Growth ETF (SCHG), and Vanguard Mega Cap Growth ETF (MGK), all boasting annualized 5-year returns near or above 18%. 

While many of these funds are concentrated in companies like Apple, Amazon, and Microsoft, they differ in fees, yield, and sector weightings. 

Finsum: Overall, growth ETFs offer an efficient path to access strong market performers with minimal effort and competitive returns.

Large-cap growth funds have recently delivered strong returns, with an average gain of 16.77% over the past year and standout performances from Fidelity, Vanguard, and Loomis Sayles offerings. 

Fidelity Advisor New Insights and Contrafund, managed by veteran Will Danoff, ranked among the top five funds, with returns exceeding 18% annually over the past five years. Loomis Sayles Growth Fund posted the highest three- and five-year gains, driven by a disciplined process and long-term investment strategy. 

Vanguard’s Growth Index and Mega Cap Growth Index funds also performed well, offering low-cost, passive exposure to top-performing large-cap growth stocks. Despite their success, these funds come with risks like high concentration in mega-cap stocks and share class accessibility issues for individual investors. 

Finsum: As interest rates remain high that could provide a relative advantage to large caps over small caps. 

Donald Trump has promised to accelerate U.S. economic growth, but the economy already surged through 2024, likely ending the year with a 3% annualized GDP gain in the fourth quarter, according to the Atlanta Fed’s GDPNow. If accurate, annual growth for 2024 would range from 2.4% to 2.7%, a rate comparable to pre-pandemic levels but unexpected in the post-pandemic era. 

This surprising strength is credited to two main drivers: an expanding population fueled by increased immigration and a notable boost in productivity, partially attributed to advancements in technology like AI. Yet, challenges remain, including persistent inflation, elevated interest rates that have slowed home and vehicle sales, and a weaker hiring environment despite low unemployment. 

Businesses are optimistic about Trump’s plans to cut taxes, streamline regulations, and reduce energy costs, though his proposals for higher tariffs and mass deportations raise fears of higher material and labor costs. 

Finsum: The outlook is upbeat, with early indicators of 2025 showing confidence, underscoring the nation’s resurgence as a global economic leader.

The wealth management industry is at a critical juncture, as the retirement of over 109,000 financial advisors in the next decade coincides with the Great Wealth Transfer, presenting a unique opportunity for firms to secure trillions in assets. 

High-net-worth clients, a key growth segment, are raising the bar with their expectations for personalized, holistic financial solutions that address complex needs like estate planning, tax optimization, and ESG-aligned investments. To stand out, advisors must deepen client relationships, focusing on understanding values, family dynamics, and long-term goals to foster trust and loyalty. 

Expanding service offerings such as direct indexing, alternative investments, and foreign currency management allows advisors to cater to sophisticated client demands while optimizing for customization and after-tax returns. 

Finsum: By aligning advanced solutions with client preferences, advisors can not only retain existing clients but also attract new ones, solidifying their competitive edge.

The US economy surprised expectations in 2024 by maintaining steady growth despite elevated interest rates, a cooling labor market, and political uncertainty tied to the presidential election. It outpaced other Group of Seven nations, with household spending driving much of this resilience. 

Wage growth outstripped inflation, and record household wealth bolstered consumer confidence, even as Americans depleted pandemic-era savings. 

However, challenges loomed: inflation proved stubborn, borrowing costs strained housing and manufacturing, and delinquencies rose among credit-dependent consumers. Labor market signals also hinted at strain, with hiring slowing, job openings shrinking, and unemployment rates ticking up. 

Finsum: While the Federal Reserve began easing rates later in the year, its cautious stance underscores the delicate balance needed to sustain growth amid persistent inflationary pressures.