Best ETFs To Play This Market Rally [Guggenheim S&P 500 Pure Growth ETF, First Trust NASDAQ-100 EqualWeighted ETF]

bullish buyAfter embarking on a soft 2014 following a run of weak data points, the U.S. markets once again picked up, sending the S&P 500 to record highs and the NASDAQ to 14-year highs. Despite initial volatility in the indices, investors seem convinced about the continuation of U.S. economic growth. The axe on QE stimulus is also giving cues of sustained economic recovery.

From a value point of view also, the market is perceived as compelling by many analysts with rich corporate cash balances.  Though a slew of recent economic data fell shy of expectations, a severe winter has taken the major share of the blame rather than deteriorating fundamentals. Economic growth is also expected to resume in the second half of the year.

In the mean time, jobless data came in favor of economic growth hitting the 5-year low in January, though the pace of job creation remained muted for two months in a row. News on the earnings front was reassuring for investors, with more companies beating earnings and revenue expectations thanks to easier comps.

Merger and acquisition activities are also picking up in the market speaking of the underlying cash strength of the big corporates.

To add to the slowly building optimism, new home sales numbers hit a five-and-a-half year high in January and a bunch of retailers came up with impressive earnings and guidance, lately.  All these have strengthened investors’ sentiment which in turn pushed up the markets despite a host of mixed-bag data (read:Homebuilder ETFs Rise on Solid Earnings, Strong Home Prices).

Amid such a backdrop, investors might be willing to bet their dollars on some growth ETFs and take part of this rally. Below we have highlighted some prudent choices targeting growth investing style which may be perfect for investors seeking a higher beta way to play this rally:

Guggenheim S&P 500 Pure Growth ETF (NYSEARCA:RPG)

Launched in March of 2006, RPG seeks to deliver the return of the S&P 500 Pure Growth Index. So far, RPG amassed an asset base of $1.3 billion. From an individual holdings point of view, the fund holds 107 stocks in a less concentrated approach. Its top holding accounts for 2.12% of the portfolio.  Hot stocks like Tripadvisor, Netflix and Facebook are some of its top holdings.

The fund predominantly invests in Consumer Discretionary (29.48%), Healthcare (16.31%) and Information Technology (15.57%) sectors. Investors should note that all three sectors have high upside potential this year and in the next in terms of earnings and revenues growth.

The fund charges a low expense ratio of 35 bps a year. RPG added about 6.15% so far this year (as of February 26, 2014) and currently has a Zacks ETF Rank #1 (Strong Buy) with ‘medium’ risk outlook.

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