Is iShares Core S&P U.S. Growth ETF (IUSG) a Strong ETF Right Now?
Smart Beta ETF report for IUSG
Launched on 07/24/2000, the iShares Core S&P U.S. Growth ETF (IUSG) is a smart beta exchange traded fund offering broad exposure to the Style Box - All Cap Growth category of the market.
What Are Smart Beta ETFs?
Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
But, there are some investors who would rather invest in smart beta funds; these funds track non-cap weighted strategies, and are a strong option for those who prefer choosing great stocks in order to beat the market.
By attempting to pick stocks that have a better chance of risk-return performance, non-cap weighted indexes are based on certain fundamental characteristics, or a combination of such.
The smart beta space gives investors many different choices, from equal-weighting, one of the simplest strategies, to more complicated ones like fundamental and volatility/momentum based weighting. However, not all of these methodologies have been able to deliver remarkable returns.
Fund Sponsor & Index
IUSG is managed by Blackrock, and this fund has amassed over $12.81 billion, which makes it one of the largest ETFs in the Style Box - All Cap Growth. This particular fund seeks to match the performance of the S&P 900 Growth Index before fees and expenses.
The S&P 900 Growth Index measures the performance of the large and mid-capitalization growth sector of the U.S. equity market.
Cost & Other Expenses
For ETF investors, expense ratios are an important factor when considering a fund's return; in the long-term, cheaper funds actually have the ability to outperform their more expensive cousins if all other things remain the same.
Annual operating expenses for IUSG are 0.04%, which makes it one of the least expensive products in the space.
It's 12-month trailing dividend yield comes in at 0.67%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
IUSG's heaviest allocation is in the Information Technology sector, which is about 40.20% of the portfolio. Its Consumer Discretionary and Telecom round out the top three.
Looking at individual holdings, Apple Inc (AAPL) accounts for about 10.64% of total assets, followed by Microsoft Corp (MSFT) and Amazon Com Inc (AMZN).
The top 10 holdings account for about 47.4% of total assets under management.
Performance and Risk
The ETF has gained about 24.20% so far this year and is up about 33.22% in the last one year (as of 10/20/2021). In the past 52-week period, it has traded between $77.70 and $109.45.
IUSG has a beta of 1 and standard deviation of 23.83% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 471 holdings, it effectively diversifies company-specific risk.
IShares Core S&P U.S. Growth ETF is an excellent option for investors seeking to outperform the Style Box - All Cap Growth segment of the market. There are other ETFs in the space which investors could consider as well.
First Trust US Equity Opportunities ETF (FPX) tracks IPOX-100 U.S. Index and the iShares Morningstar Growth ETF (ILCG) tracks MORNINGSTAR US LARGE-MID CP BRD GRWTH ID. First Trust US Equity Opportunities ETF has $2.07 billion in assets, iShares Morningstar Growth ETF has $2.19 billion. FPX has an expense ratio of 0.57% and ILCG charges 0.04%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Style Box - All Cap Growth.
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
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iShares Core S&P U.S. Growth ETF (IUSG): ETF Research Reports
Amazon.com, Inc. (AMZN): Free Stock Analysis Report
Apple Inc. (AAPL): Free Stock Analysis Report
Microsoft Corporation (MSFT): Free Stock Analysis Report
First Trust US Equity Opportunities ETF (FPX): ETF Research Reports
iShares Morningstar Growth ETF (ILCG): ETF Research Reports
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