January 2019 was a big month for the iShares S&P 500 ETF (ASX: IVV).
As a refresher, the iShares S&P 500 ETF is an exchange traded fund (ETF), IVV aims to provide a low-cost, diversified exposure to American businesses in the S&P 500 Index, which includes 500 of the biggest businesses listed in the United States. It is offered by BlackRock, a world leading provider of low cost ETFs.
Why Jan’ 19 Was A Huge Month
After the iShares S&P 500 ETF fell 11% in three months during the December 2018 quarter, it went up nearly 4.2% in January 2019, which is quite a large rise for a single month.
Of course, the ETF was still down around 7% over the four months to January 2019, but it shows how quickly share markets can recover.
One of the largest contributors to the iShares S&P 500 ETF’s rise was the Microsoft share price going up by 2.8% during the month. Microsoft is currently the largest weighting in the index.
The upshot is very promising, according to analysts investment bank UBS. According to Bloomberg reporting, Keith Parker of UBS reversed a recent cut to his 2019 forecasts following bullish moves since Christmas.
“A more ‘patient’ Fed helped turn risk sentiment,” Parked said to clients. He now expects the S&P 500 to hit 2,950 points by June, implying another 5.5% upside.
However, with a price/earnings ratio of nearly 21, the S&P 500 is not cheap yet, despite the recent declines. But there could be more recovery to come if the trade war is resolved between the US and China.