SPYG S&P500 Growth ETF - A Low Cost Easy Way To Tap on The Magnificent 7 Growth

🌟🌟🌟Four Members of the Magnificent 7 have reported their Q1 24 earnings this week with 3 of them receiving positive response from investors while the 4th member did not.

This has been an eventful week for the markets as stocks jumped on Friday due to stellar reports of $Alphabet(GOOG)$  and $Microsoft(MSFT)$ 

Google jumped more than 10% on better than expected Q1 24 earnings and recorded its best day since July 2015.  It authorised its first ever dividend and a USD 70 billion buyback.  Google's market capitalisation has now reached USD 2.15 Trillion. 

Microsoft added almost 2% as it posted strong fiscal 3rd quarter results and showed an acceleration in Cloud growth.

However $Meta Platforms, Inc.(META)$  dropped 9.4% for the week as it posted lower than expected revenue guidance for the 2nd quarter.  Its plans to increase its AI investments by a substantial amount worried investors.  However on the plus side Meta reported solid 1st quarter results with Q1 revenue of USD 36.4 billion versus USD 36.22 billion expected.  EPS also came in at USD 4.71, well above estimate for USD 4.32 per share.

$SPDR Portfolio S&P 500 Growth ETF(SPYG)$ provides a low cost way to tap into the large Cap Growth stocks from the S&P500 Index.  In just 1 trade you gain access to the Magnificent 7 stocks, Eli Lilly and Broadcom. 

Growth stocks can produce above average returns in the long term but tend to carry more short term market volatility in contrast to value stocks which tend to produce more stable returns. 

SPYG holds 227 companies from the S&P500 Index based on 3 growth factors - Sales Growth, the ratio of earnings change to price and momentum.  Stocks that are selected are based on those that meet positive earnings in the most recent 4 quarters. 

The Top 10 holdings include Microsoft, Apple, Nvidia, Amazon, Meta Platforms, Alphabet Class A and Class C, Eli Lilly, Broadcom and Tesla. 

The Top 10 holdings weightage is 58%.  Total number of holdings is 227.  The expense ratio is a low 0.04%.  Assets Under Management is USD 24.2 Billion.  Inception date was September 25 2000.  Distributions are paid every 3 months.  The current Distribution yield is 0.96%.

$Apple(AAPL)$  and $Amazon.com(AMZN)$  are set to report their Q1 24 earnings next week. 

What I like about SPYG is that the ETF does the heavy lifting for me, choosing the best growth stocks and removing the non performing ones.  Even if negative news hit a particular stock like Meta Platforms this week, the impact is lessen simply due to the combined strength of the other growth stocks.  I do not need to worry about reading company reports too, giving me more time to relax and sleep well at night. 

Performance wise SPYG is up 1.9% on Friday and 3.6% for the  week.   SPYG has risen 11.7% year todate.  In 2023, SPYG is up 27%.

Wall Street Analysts are bullish on SPYG with a Buy rating, Target price of USD 81.49, an upside potential of 14%.

Investing does not have to be complicated.  With SPYG, I can rest easy knowing that I have the best growth stocks in 1 powerful ETF that includes all members of the Magnificent 7 in 1 go.  How good is that! 

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