Abstract
We forecast earnings growth in the next 5 years for stock-market-indexed exchange-traded funds (ETFs). Our methods include the P/E and P/B cross-sectional regression-implied (RI) estimates and the earnings growth random-walk (RW) estimates. Our results show that compared with the actual earnings growth, both the RI and RW forecasts of earnings growth are unbiased for the U.S. ETFs but biased for the foreign ETFs. In addition, the RI method generates smaller forecast errors than the RW method for the U.S. ETFs but holds no advantage over the RW method for the foreign ETFs. Therefore, the RI forecast may be a useful method for the U.S. ETFs during our sample period of 2000-2023 but may not be so for the foreign ETFs.
| Original language | English |
|---|---|
| Pages (from-to) | 48-68 |
| Journal | Journal of Finance Issues |
| Volume | 23 |
| Issue number | 3 |
| Online published | 15 Oct 2025 |
| DOIs | |
| Publication status | Published - 2025 |
Bibliographical note
Research Unit(s) information for this publication is provided by the author(s) concerned.Research Keywords
- Earnings growth forecast
- Regression-implied forecast
- Random-walk forecast
Publisher's Copyright Statement
- COPYRIGHT TERMS OF DEPOSITED FINAL PUBLISHED VERSION FILE: He, Yan, and Junbo Wang. 2025. “Earnings Growth Forecast for ETFs”. Journal of Finance Issues 23 (3):48-68. https://doi.org/10.58886/jfi.v23i3.10442.
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