With third-quarter earnings season in the books, it’s safe to say it was a productive one as earnings per share growth among S&P 500 member firms reached 12.9%, easily topping the 8% increase expected by analysts.
Should that trend continue, and some experts believe it will, advisors and investors may want to evaluate the WisdomTree U.S. LargeCap Fund (EPS ). The $1.35 billion EPS, which turns 19 years old in February, follows the WisdomTree U.S. LargeCap Index – an earnings-weighted collection of domestic large-cap stocks.
Put simply, stocks must be generating positive earnings to make the cut for entry into that index and the ETF. The higher a company’s earnings are, the bigger the weight it commands in EPS. With that in mind, it’s not surprising that earnings powerhouses Alphabet (GOOGL), Nvidia (NVDA), and Apple (AAPL) combine for more than 19% of the fund’s portfolio.
EPS Matters Today
The WisdomTree is highly pertinent at a time when many market participants are skittish about frothy valuations. The ETF’s emphasis on earnings shines through at a time when earnings growth is essential to supporting elevated multiples.
“Sustained earnings growth is crucial for supporting these valuations,” says Rob Haworth, senior investment strategy director with U.S. Bank Asset Management Group. “With valuations rich by historical measures, companies can’t afford earnings stumbles, and so far, they’ve hit the mark.”
As investors know, a significant part of the broader market’s upside and earnings growth in recent years has been driven by mega-cap stocks tied to artificial intelligence (AI). EPS positions market participants to capitalize on that trend as the ETF allocates more than 41% of its roster to technology and communication services equities.
“Significant (AI)-related investment spending continues driving technology company revenues. After a slow start to the year, information technology is once again among the top-performing sectors in the S&P 500, with year-to-date total returns near 25%. Market gains broadened in 2025, with communication services, industrials, and utilities stocks delivering returns between 18% and 34%,” adds U.S. Bank.
While EPS can stand as a complement or alternative to traditional cap-weighted broader-market ETFs and index funds, implying it’s a solid idea for long-term investors (it is), the fund merits near-term consideration as well, since fourth-quarter earnings season is right around the corner and could be another good one. Likewise, earnings growth could accelerate throughout 2026, potentially bolstering EPS.
“The consensus earnings growth estimate for S&P 500 companies in 2025 compared to 2024 is 10%. The growth estimate for 2026 compared to 2025 is 13.2% for S&P 500 companies. These forecasts may change as new information emerges, but the economy and corporate profits remain solid, even in the new tariff environment,” concludes U.S. Bank.
This article was prepared as part of WisdomTree’s general paid sponsorship of VettaFi | ETF Trends. This specific content within and any opinions expressed therein belong solely to VettaFi and do not reflect the opinion or analysis of WisdomTree, its employees, or its affiliates. Content published on VettaFi | ETF Trends is provided for educational purposes only and should not be considered investment or tax advice. For investment or tax advice, please consult a financial professional.
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