In the recent series of record highs, the S&P 500 crossed the 3,100 level for the first time ever. With this, the benchmark has increased 23.5% this year. Most of the rally was buoyed by trade deal optimism and stronger-than-expected corporate earnings. The Fed’s rate cut for the third time this year has also bolstered the risk appetite of investors.
A slew of mergers & acquisitions and rising oil price have added to this upside. The trend is likely to continue though bouts of volatility and instability have kept crossing the bulls (read: 10 Top-Ranked ETFs Beating S&P 500 This Year).
The proxy version, SPDR S&P 500 ETF Trust SPY, which tracks the S&P 500 Index has gained 25.4% so far this year. Let’s take a closer look at the fundamentals of SPY and the stocks behind this rally:
Inside The SPY
The ETF holds 505 stocks in its basket with each security holding not more than 4.4%. This suggests a nice balance across each security and prevents heavy concentration. The fund is widely spread across sectors with information technology, healthcare, financials and communication services being the top four, with double-digit allocation each. It has AUM of $280.1 billion and charges 9 bps in fees per year from investors. The product trades in heavy volume of around 67.4 million shares a day on average, ensuring higher liquidity with a tight bid/ask spread, leading to lower trading costs for investors (read: S&P 500 Crosses 3,100: Profit From These ETFs).
SPY has a Zacks ETF Rank #2 (Buy) with a Medium risk outlook. Though most stocks in the fund’s portfolio have delivered astounding returns in the year-to-date time frame, a few were the real stars, skyrocketing more than 70%. Below, we have highlighted the 10 best-performing stocks in the ETF so far this year:
Best-Performing Stocks of SPY
Advanced Micro Devices Inc. AMD: The provider of microprocessors and servers with a Zacks Rank #3 (Hold) has surged about 99% and has a massive earnings growth rate of 30.43% for this year. Additionally, the stock belongs to a favorable Zacks industry (placed at the top 13% of 250+ industries).
Lam Research Corporation LRCX: The wafer fabrication equipment supplier has climbed more than 98% and carries a Zacks Rank #2 (Buy). It has an estimated earnings growth rate of 3.37% for the fiscal year (ending June 2020) and belongs to a favorable Zacks industry (placed at the top 7%) (see: all the Large Cap ETFs here).
KLA-Tencor Corporation KLAC: This Zacks #2 Ranked company is an original equipment manufacturer (OEM) of process diagnostics and control (PDC) equipment. It has soared nearly 95% and has an earnings growth rate of 16.78% for the fiscal year (ending June 2020). The stock belongs to a favorable Zacks industry (placed at the top 35%).
Xerox Corporation XRX: This print technology and intelligent work solutions provider has jumped 89.5% and belongs to an unfavorable Zacks industry (placed at the bottom 24% of 250+ industries). The company is expected to see earnings growth of 17.05% for this year and has a Zacks Rank #2.
Coty Inc. COTY: This beauty product company has been up more than 89% so far this year and has an earnings growth rate projection of 3.08% for the full fiscal (ending June 2020). It belongs to a favorable Zacks industry (placed at the top 27%).
Chipotle Mexican Grill Inc. CMG: This restaurant has gained more than 75% so far this year and boasts an impressive earnings growth expectation of 51.66% for this year. It falls under a favorable Zacks industry (placed at the top 32%) and carries a Zacks Rank #2 (read: 9 High-Flying ETFs of 2019).
Arconic Inc. ARNC: This Zacks Rank #2 company is a global leader in multi-material, precision engineered products and solutions for a variety of industries. It delivered returns of about 75% in the year-to-date time frame and belongs to a favorable Zacks industry (placed at the top 30%). Its earnings are expected to grow 54.4% this year.
MarketAxess Holdings Inc. MKTX: It is the operator of one of the leading platforms for the electronic trading of corporate bonds and certain other types of fixed-income securities. The stock is up 73.2% so far this year and sports a Zacks Rank #1 (Strong Buy). Its earnings are expected to grow 18.6% this year and MarketAxess falls under favorable Zacks industry (top 4%). You can seethe complete list of today’s Zacks #1 Rank stocks here.
Keysight Technologies Inc. KEYS: This Zacks #3 Ranked company is a provider of electronic design and test instrumentation systems. It has soared 72.5% and has an earnings growth rate of 6.92% for the full fiscal (ending October 2020). The stock belongs to a favorable Zacks industry (top 15%).
Copart Inc. CPRT: This Zacks Rank #2 online auction provider has surged more than 72%. It has an earnings growth rate of 18.67% for this fiscal year (ending July 2020) and belongs to a favorable Zacks industry (top 42%).
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Coty Inc. (COTY): Free Stock Analysis Report
Advanced Micro Devices, Inc. (AMD): Free Stock Analysis Report
Keysight Technologies Inc. (KEYS): Free Stock Analysis Report
SPDR S&P 500 ETF (SPY): ETF Research Reports
Arconic Inc. (ARNC): Free Stock Analysis Report
Xerox Corporation (XRX): Free Stock Analysis Report
Chipotle Mexican Grill, Inc. (CMG): Free Stock Analysis Report
KLA-Tencor Corporation (KLAC): Free Stock Analysis Report
Lam Research Corporation (LRCX): Free Stock Analysis Report
MarketAxess Holdings Inc. (MKTX): Free Stock Analysis Report
Copart, Inc. (CPRT): Free Stock Analysis Report
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.