All the key indexes witnessed significant milestones in the first half of this year, with both the Dow and S&P 500 registering their best growth since the same period in 2013. Additionally, a significant jump in tech stocks benefited the tech-laden index, Nasdaq, which posted its best first-half performance since 2009. 

Initially, optimism over President Donald Trump-led pro-growth economic policies boosted markets in the early part of this period. After expectations over Trump-led economic policies fizzled, investors gained confidence from economic data and earnings results in the latter part of the first half. Better corporate earnings and a record decline in the unemployment rate facilitated this growth.

Banking on such positive vibes, the addition of mutual funds to your portfolios having strong exposure to U.S. companies could prove lucrative. Now, let us take a look at some of the encouraging factors that contribute to gains in these mutual funds.

Benchmarks Post Record Gains

The Dow and S&P 500 each gained around 8% in the first half, their best gains since 2013. Further, the Nasdaq rose 14.1%, marking its best performance since 2009. All the five tech behemoths Facebook Inc (FB – Free Report) , Apple Inc. (AAPL – Free Report) , Amazon.com, Inc. (AMZN – Free Report) , Netflix, Inc. (NFLX – Free Report) and Alphabet Inc (GOOGL – Free Report) or “FAANG” gained more than 16%, leading the Nasdaq to such a remarkable performance.

Positive sentiments over Trump’s economic policies including “massive” tax cuts, deregulation initiatives and surge in infrastructure spending propelled the indexes higher in the first part of the previous half. But markets managed to maintain their sheen even when Trump’s policies failed to gain passage in the Congress, on the back of a strong job market and solid corporate earnings.

Earnings Upbeat

The S&P 500 members registered Q1 earnings growth of 13.3% which was double the growth expected at the start of the last reporting cycle. The picture that emerged from the Q1 earnings season was one of notable improvement over other recent periods, with growth reaching the highest level in more than five years.