Big Money has been selling a lot recently, causing losses almost market-wide (energy being the only survivor). Fears over inflation and the Federal Reserve raising interest rates, among other worries, have spooked investors. Going to MAPsignals.com, we can scan Big Money ETF buys and sells. Recent big selling, indicated by the deep red lines in the chart below, can help explain the market drawdown:
When markets move like this, the hysteria can entrap great assets and cause them to be sold off. To identify those “unfairly hit,” long-term investors need to look for ETFs (and their stocks) with great setups.
Remember: ETFs are just baskets of stocks, so we need to look at them in detail. MAPsignals specializes in scoring more than 6,500 stocks daily. If I know which stocks compose the ETFs, I can apply stock scores to the ETFs. Then I can rank them all from strongest to weakest.
Let’s get to the five best oversold growth ETFs to buy now.
#1 iShares Expanded Tech-Software Sector ETF (IGV)
This ETF has been getting hammered since about mid-November of last year. Below are the buys and sells for the fund according to the Big Money process:
IGV holds several solid stocks; one example is its largest holding, Microsoft Corporation (MSFT). Here are the times MSFT was a high-ranking Big Money buy signal since 2016:
#2 First Trust Dow Jones Internet Index Fund (FDN)
FDN holds some of the biggest, most successful stocks out there. These are names we’ve all heard of and know well. Their ability to bounce back is appealing, as is the growth of FDN:
One great stock FDN holds is Amazon.com, Inc. (AMZN). It’s a long-time Big Money favorite with awesome fundamentals. As the multi-year chart below shows, it’s been a monster stock for a while:
#3 First Trust Cloud Computing ETF (SKYY)
Big Money started buying this ETF focused on cloud computing back in 2020, and no wonder because it holds tremendous stocks. Given its quality, I think this could be a great opportunity to get a solid growth ETF at a discount price:
One of the biggest holdings within SKYY is Arista Networks, Inc. (ANET). It’s an outlier stock that Big Money has liked for years:
#4 iShares Russell 2000 Growth ETF (IWO)
While it’s been a weaker-performing ETF of late, IWO still holds stocks with strong growth prospects. IWO has been sold hard, but this could be an opportunity:
One company within this ETF on a pullback that could flourish is Synaptics Incorporated (SYNA). Big Money loved it for years. The multi-year chart shows a lot of blue signals years ago:
#5 ARK Innovation ETF (ARKK)
While it has fallen significantly, ARKK holds innovative companies that could overturn the business world. So, it could be a potential scoop down here.
One great stock in ARKK is Tesla Inc. (TSLA). It’s held up relatively well during the growth pullback and has a phenomenal long-term trend. Big Money has loved TSLA for a long time:
Fair or not, all these ETFs have been hit hard this year due to their growth-oriented focus. But that doesn’t change the fact they hold great stocks that could rise in the future.
The Bottom Line
IGV, FDN, SKYY, IWO, and ARKK are my best oversold growth ETFs to buy now. These picks are poised to do well going forward, in my opinion, largely because they each hold great stocks. They may be experiencing selling pressure, but on quality assets, deep red days often prove to be fire sales over time.
To learn more about MAPsignals’ Big Money process please visit: www.mapsignals.com
Disclosure: the author holds no positions in IGV, FDN, SKYY, IWO, ARKK, MSFT, AMZN, ANET, SYNA, or TSLA in managed or personal accounts at the time of publication.
Investment Research Disclaimer
This article was originally posted on FX Empire
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