The Wall Street logged the strongest year since 2013 with the S&P 500 gaining 19.4% and the Dow Jones capping 25.1% gains last year, with the highest-ever number of record closes. Blockbuster corporate earnings and the resurgent global economic growth were the major catalysts in driving the stocks throughout the year.

Growth in the U.S. economy has been solid, buoyed by an impressive labor market, higher wages, increasing consumer spending and high consumer confidence. Notably, the economy expanded at the fastest clip in three years in best back-to-back quarters with at least 3% GDP growth and unemployment at the lowest level of 4.1% since December 2000. Americans are highly optimistic about the economy, with consumer confidence hovering near the highest level in 17 years.

This combined with the optimism over the biggest tax overhaul in decades has raised the appeal for riskier assets. The new tax structure will save billions in the corporate world, boosting earnings and reflation trade. It would further spark a wave of share buybacks, dividend hikes and mergers & acquisitions. All these suggest that an eight-year bull market still has legs and will strengthen the second-largest bull run in the history.

If these aren’t enough, oil price has also rebounded strongly to $60 per barrel and will continue rising given easing global supply cut and increasing demand. Nevertheless, North Korea tensions, Brexit concerns, Fed aggressive rates hike, Washington turmoil, mid-term elections and overvaluation fears might weigh on the stock performance.

Given this, we have highlighted a pack of ETFs that look to outperform in 2018 given the current trends.

SPDR Dow Jones Industrial Average ETF (DIA): This ETF, tracking the Dow Jones Industrial Average, has been the biggest beneficiary of the rotation in leadership in the large-cap domestic space and Trump’s pro-growth policies. The index has moved up 5,000-points this year — the biggest annual gain in its history. The bullish trend is likely to continue this year. With AUM of $22.3 billion, the fund has a Zacks ETF Rank #2 (Buy) with a Medium risk outlook.

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