SPYG ETF

Last week, the S&P 500 Style Indexes were rebalanced, resulting in major changes to the ETFs that follow them, specifically SPYG and SPYV. Notably, Apple, Microsoft, and Amazon are now split between the two ETFs, and SPYV's exposure to the Magnificent Seven increased from 0% to 19%, indicating that returns may become more similar in 2025. The S&P 500 Growth Index also rebalanced as anticipated, showing better performance in important areas such as sales growth, earnings growth, and price momentum.

The valuations for SPYG are hitting levels we haven't observed since the dot-com bubble. Some companies in the fund, such as Coca-Cola and Costco, aren't really growth stocks, but they are being valued as if they are. Many of SPYG's investments are cyclical and are priced very high, which could result in poor returns in the future.

The SPDR Portfolio S&P 500 Growth ETF (SPYG) is an exchange-traded fund that aims to give investors a wide exposure to the Large Cap Growth part of the US stock market. It was launched on September 25, 2000, and is managed passively.

I have a hold rating on SPYG because it has a high valuation and value stocks might see their earnings growth improve. While SPYG has delivered strong returns, its elevated forward P/E ratio and focus on the Magnificent Seven stocks create risks in terms of diversification. The ETF's technical chart indicates resistance around $84 in the short term, but the long-term trend is still positive, especially with favorable seasonal patterns in October and November.

If you want to gain a wide understanding of the Large Cap Growth part of the US stock market, consider the SPDR Portfolio S&P 500 Growth ETF (SPYG). This is a passively managed exchange-traded fund that started on September 25, 2000.

Earnings season features Tesla, Alphabet, Meta Platforms, Apple, Amazon, Microsoft, and Nvidia. SPYG remains a favorite large-cap growth ETF for potential future appreciation. Risks to investing in SPYG include market rotation, disappointing earnings, and underperformance in value-focused markets.

Designed to provide broad exposure to the Large Cap Growth segment of the US equity market, the SPDR Portfolio S&P 500 Growth ETF (SPYG) is a passively managed exchange traded fund launched on 09/25/2000.

SPYG tracks the S&P 500 Growth Index, selecting S&P 500 stocks that feature solid sales and earnings growth rates, strong price momentum, and high valuations. Historically, it's underperformed many peers over the long run because of its price momentum screen, but based on my analysis, that shouldn't factor much into the end-of-year rebalancing. That leaves investors with a portfolio of stocks with competitive historical and estimated sales and earnings growth rates, slightly below-average valuations, and strong sentiment on Wall Street.

The SPDR Portfolio S&P 500 Growth ETF holds a collection of large-cap growth stocks from the S&P 500 index. It has slightly outperformed the index over the last four years and has a significant focus on growth sectors. Currently, SPYG is valued at a high price, so investors might consider waiting for a more favorable buying opportunity.