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Growth ETFs Are Showing Some Holiday Cheer

Growth stock-related exchange traded funds continued to climb on Monday as strong retail sales helped fuel the broader market’s momentum and somewhat offset COVID-19 Omicron concerns over the U.S. economy.

Retail sales increased 8.5% during this year’s holiday shopping season from November 1 to December 24, Reuters reports.

However, travel-related stocks retreated after U.S. airlines canceled 800 more flights on Monday after scrubbing thousands of flights over the traditionally busy Christmas weekend due to surging Omicron cases.

“The market is much more likely to respond to Omicron crimping consumer demand, as opposed to it being an issue of airlines not being able to supply the flights,” Aoifinn Devitt, Moneta chief investment officer, told Reuters. “That supply issue is a temporary phenomenon that will definitely be disruptive. But it’s a fixable phenomenon.”

U.S. markets have weakened in recent weeks over fears that the rapid infection rates of the Omicron variant would disrupt the economic recovery as countries re-implemented curbs to halt infections. Now, market observers are optimistic that Omicron might be mitigated by vaccination efforts and the rollout of booster shots in some countries, along with observations that the variant is potentially less severe than the Delta variant.

“Everything seems to be serious but manageable. Anything that changes that, this could probably make a big impact,” Luca Paolini, chief strategist at Pictet Asset Management, told the Wall Street Journal.

Investors interested in the growth style can turn to targeted strategies like the American Century Focused Dynamic Growth ETF (FDG). FDG is a high-conviction strategy that invests in early-stage, rapid-growth companies with a competitive advantage and high profitability, growth, and scalability.

Additionally, investors can look to the American Century STOXX U.S. Quality Growth ETF (NYSEArca: QGRO). QGRO’s stock selection process is broken down into high-growth stocks based on sales, earnings, cash flow, and operating income, along with stable-growth stocks based on growth, profitability, and valuation metrics.

For more news, information, and strategy, visit the Core Strategies Channel.

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