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Earnings or revenue-weighted ETFs: Finding the Q2 winner

The earnings season is in full swing. Out of 350 members from the S&P 500 index that have reported already, 74% beat on bottom line and 68% surpassed revenue estimates, as per the latest earning trends. Growth appears slightly weaker than the prior period, but beat ratios emerged stronger, especially on the top line.

As per an article published on Financial Times, revenue growth at blue-chip U.S. companies like JPMorgan, Visa and Caterpillar beat analyst expectations at almost the decade-best.

As of now, as much as 70% of the S&P 500 companies have reported earnings, with an 11% year-over-year jump on 5.9% revenue growth. In fact, investors should note that revenue expansion for the upcoming period is better than earnings expansion. For the upcoming Q3 earnings season, earnings are expected to grow 4.5% while revenues are likely to expand 4.6%.

Against such an earnings and revenue backdrop, let’s find out which ETFs — earnings-weighted or revenue-weighted — grabbed the spotlight in the Q2 reporting cycle.

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