COWG: High Tech, High Momentum, High Returns, High Valuation

2025-05-29 20:23:36 ET

Summary

• COWG has rebounded strongly post-election, tracking large-cap growth, but its valuation is not compelling at nearly 25x earnings and a high PEG ratio.
• The ETF is heavily concentrated in Information Technology and Health Care, raising concerns about industry diversification and portfolio risk.
• Momentum and seasonal trends are favorable into summer, but upcoming shareholder meetings and recent volatility could trigger short-term price swings.
• I maintain a hold rating on COWG due to its premium valuation and sector concentration, despite a constructive technical setup and strong recent performance.

US large-cap growth has rebounded into positive territory year-to-date. While mega-cap tech took it on the chin to begin the year, a May rebirth among the Magnificent Seven stocks has helped send both the Nasdaq 100 ETF (QQQ) and the S&P 500 Growth ETF (SPYG) back to black for 2025. ...

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