Finance 0

Earnings Or Revenue-Weighted ETFs: Q3 Winners

By Kurt Osterberg · On November 19, 2017

We are in the midst of a full-blown earnings season. Out of the 327 members from the S&P 500 index that have reported already, 74.9% beat on bottom line and 65.7% surpassed revenue estimates, per the Earnings Trends issued on Nov 1, 2017. Ongoing positive revenue momentum and favorable revisions in estimates for the current period are most notable factors.

Sequential earnings growth appears relatively weak (from 11.2% in Q2 to 5.6% in Q3), but top-line momentum continues. As of Nov 1, 2017, expected revenue growth for Q3 is 5.5%, same as that of Q2.

As of now, as much as 65.4% of the S&P 500 companies have reported earnings, with a 7.8% year-over-year jump on 6.5% revenue growth. Against such an earnings and revenue backdrop, let’s find out the ETFs — earnings or revenue-weighted — that were in the spotlight in the Q3 reporting cycle.

Oppenheimer Large Cap Revenue ETF (RWL – Free Report) Versus WisdomTree U.S. Earnings 500 Fund (EPS – Free Report)

RWL: Stocks in the fund are graded on the basis of top line. The top three holdings of the fund are Wal-Mart (4.9%), Apple (2.2%) and Berkshire Hathaway (2.2%). Consumer Cyclical (15.9%), Health Care (15.6%) and Financials (14.2%) are three of the leading sectors. The fund charges 39 bps in fees (read: Tap Q3 Growth with Revenue-Weighted ETFs).

EPS: It offers exposure to U.S. large cap companies that are profitable. The top three stocks are Apple (6.35%), Berkshire Hathaway (2.39%) and Alphabet Inc-Cl A (2.25%). The fund charges 28 bps in fees. IT (23.41%), Financials (19.78%) and Health Care (13.33%) round out the top three sectors (read: Hurricanes Impact on Earnings ETFs?).

Oppenheimer Mid Cap Revenue ETF (RWK – Free Report) Versus WisdomTree U.S. MidCap Earnings Fund (EZM – Free Report)

RWK: The same revenue-weighted objective is applied here on the mid-cap level. Tech Data Corp. (2.25%), AutoNation Inc. (1.85%) and Arrow Electronics Inc. (1.85%) are the top three stocks. The fund charges 39 bps in fees. Consumer Cyclical (18.5%), Information Technology (17.0%) and Industrials (17.0%) are the top three sectors of the fund.