Move over Nasdaq 100, we have a new leader in town! The Invesco Russell MidCap Pure Growth ETF (PXMG) with 97 holdings broke out of a 10 year downtrend against the Nasdaq 100 in early 2018.

The difference in performance is very noticeable: The MidCap Growth 100 has gained 17% since January 1st, 2018, nearly tripling the 5% gain of the Nasdaq 100 in the same period.

The top three sectors of this ETF are Technology (42% weighting), Consumer Discretionary (21%) and Health Care (15%). No surprise here with Technology and Consumer Discretionary leading the broad market the past few years.

Top 10 Holdings of the PXMG MidCap Growth ETF:

Square (SQ) with a 2.8% weighting
Chipotle Mexican Grill (CMG), 2.6%
Ulta Beauty (ULTA), 2.5%
Exelixis (EXEL), 2.4%
Paycom Software (PAYC), 2.2%
O’Reilly Automotive (ORLY), 2.2%
RingCentral (RNG), 2.1%
Edwards Lifesciences (EW), 1.9%
ABIOMED (ABMD), 1.9%
Lululemon Athletica (LULU), 1.8%

Interesting to see that the top holding, Square, has a weighting of just 2.8%. This is much smaller than the top weightings of the Nasdaq 100. Amazon, Microsoft and Apple all have 9% or greater weightings in the most popular Nasdaq 100 ETF (QQQ)

Top 10 Holdings of the QQQ Nasdaq 100 ETF:

Amazon (AMZN) with a 10% weighting
Microsoft (MSFT), 10%
Apple (AAPL), 9%
Alphabet (GOOG), 4.6%
Facebook (FB), 4.4%
Alphabet (GOOGL), 4.1%
Intel (INTC), 3%
Cisco (CSCO), 2.7%
Comcast (CMCSA), 2.2%
PepsiCo (PEP), 2.1%

From the chart, we also see that the PXMG ETF outperformed the Nasdaq 100 from 2005 until 2008. The breakout of Growth MidCaps in 2018 may suggest the market is returning to a period of MidCap leadership similar to the mid 2000s. What happened during the mid 2000s? Falling US Dollar, Oil and Commodity boom, emerging markets boom, housing boom. LargeCap Growth stocks lagged during this period. -Harry