Zacks
0
All posts from Zacks
Zacks in Our Research. Your Success.,

U.S. Services PMI up in June: ETFs in Focus

Service activity in the U.S. accelerated in June, as represented by the Institute for Supply Management’s (ISM) non-manufacturing index.


The ISM non-manufacturing PMI came up with a reading of 57.4 in June 2017 compared with 56.9 in May. This was above economists’ expectations of a reading of 56.5 for June. A reading above 50 indicates expansion.


Per CNBC, other services was the only industry among the 17 surveyed, which experienced contraction. Moreover, there was acceleration in growth of new orders as the new orders index surged to 60.5 in June compared with 57.7 in May.


There was a decline in the ISM employment sub-index, as it fell to 55.8 in June compared with 57.8 in the previous month. However, changes in U.S. non-farm payrolls were positive as 222,000 new positions were created in June compared with expectations of 179,000. The jobless rate stood at 4.4%.


Moreover, the economy seems to be in good shape. Trade deficit shrank 2.3% in May 2017, owing to an increase in exports. Strong consumer confidence is also representative of optimism in the economy, as it hit 118.9 in June compared with 117.6 in May (read: US Trade Deficit Declines in May: ETFs in Focus).  


Let us now discuss a few ETFs focused on providing exposure to U.S. equities.


SPDR S&P 500 ETF SPY


This fund is the most popular ETF traded in the U.S. markets. It seeks to provide exposure to the largest and most stable companies and tracks the S&P 500 index.


It has AUM of $235.73 billion and charges a fee of 9 basis points a year. From a sector look, the fund has high exposures to Information Technology, Financials and Health Care with 22.24%, 14.77% and 14.49% allocation, respectively (as of July 6, 2017). The fund’s top three holdings are Apple Inc AAPL, Microsoft Corporation MSFT and Amazon.com Inc AMZN with 3.60%, 2.56% and 1.85% allocation, respectively (as of July 6, 2017). The fund has returned 15.76% in the last one year and 9.31% year to date (as of July 7, 2017). It currently has a Zacks ETF Rank 2 with a Medium risk outlook (read: Amazon's Foray Into Grocery to Hurt/Help These Stocks & ETFs).


iShares Core S&P 500 ETF IVV


This fund is a low cost ETF that seeks to provide exposure to the large established U.S. companies and tracks the S&P 500 index.


It has AUM of $116.39 billion and charges a fee of 4 basis points a year. From a sector look, the fund has high exposures to Information Technology, Financials and Health Care with 22.17%, 14.71% and 14.46% allocation, respectively (as of July 6, 2017). The fund’s top three holdings are Apple Inc, Microsoft Corporation and Amazon.com Inc with 3.59%, 2.56% and 1.85% allocation, respectively (as of July 6, 2017). The fund has returned 15.26% in the last one year and 8.80% year to date (as of June 30, 2017). It currently has a Zacks ETF Rank 2 with a Medium risk outlook.


PowerShares QQQ ETF QQQ


This fund is a popular ETF that maintains a hefty exposure to U.S. tech companies and tracks the Nasdaq 100 index.


It has AUM of $50.20 billion and charges a fee of 20 basis points a year. From a sector look, the fund has high exposures to Information Technology, Consumer Discretionary and Health Care with 57.81%, 22.12% and 11.43% allocation, respectively (as of July 7, 2017). The fund’s top three holdings are Apple Inc, Microsoft Corporation, and Amazon.com Inc with 11.6%, 8.28% and 7.22% allocation, respectively (as of July 7, 2017). The fund has returned 25.47% in the last one year and 16.83% year to date (as of July 7, 2017). It currently has a Zacks ETF Rank 1 (Strong Buy) with a Medium risk outlook.


Want key ETF info delivered straight to your inbox?

Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week. Get it free >>





 


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
Amazon.com, Inc. (AMZN): Free Stock Analysis Report
 
Apple Inc. (AAPL): Free Stock Analysis Report
 
Microsoft Corporation (MSFT): Free Stock Analysis Report
 
NASDAQ-100 SHRS (QQQ): ETF Research Reports
 
SPDR-SP 500 TR (SPY): ETF Research Reports
 
ISHARS-SP500 (IVV): ETF Research Reports
 
To read this article on Zacks.com click here.
 
Zacks Investment Research
 
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report