The Financial Times reported today that the S&P 500 companies in the exchange-traded funds or ETFs that track this index such as (IVV) continued its streak of 10% plus earnings growth.
For the 14th consecutive quarter, companies in the index had earnings growth of more than 10% in the fourth quarter of 2006. Some tax breaks and financial engineering no doubt helped the numbers and the underlying growth certainly was lower.
The question is where do the numbers go from here? Most analysts expect earning to grow about 7% for the year and peaking mid year. Another option for ETF investors looking to invest in large companies is the Diamond (DIA) which tracks the Dow Jones Industrial Average and the Mega Cap ETF (XLG) which is an ETF basket containing the largest 50 American companies. Or go global with (IOO) which is a basket of the largest 100 companies in the world with about half of them based in America.
By Carl Delfeld of the Chartwell ETF Advisor
Comments