Should iShares Russell 1000 Growth ETF (IWF) Be on Your Investing Radar?
Style Box ETF report for IWF
The iShares Russell 1000 Growth ETF (IWF) was launched on 05/22/2000, and is a passively managed exchange traded fund designed to offer broad exposure to the Large Cap Growth segment of the US equity market.
The fund is sponsored by Blackrock. It has amassed assets over $75.96 billion, making it one of the largest ETFs attempting to match the Large Cap Growth segment of the US equity market.
Why Large Cap Growth
Companies that find themselves in the large cap category typically have a market capitalization above $10 billion. They tend to be stable companies with predictable cash flows and are usually less volatile than mid and small cap companies.
Qualities of growth stocks include faster growth rates compared to the broader market, as well as higher valuations and higher than average sales and earnings growth rates. Further, growth stocks have a higher level of volatility associated with them. Compared to value stocks, growth stocks are a safer bet in a strong bull market, but don't perform as strongly in almost all other financial environments.
When considering an ETF's total return, expense ratios are an important factor, and cheaper funds can significantly outperform their more expensive counterparts in the long term if all other factors remain equal.
Annual operating expenses for this ETF are 0.19%, making it one of the cheaper products in the space.
It has a 12-month trailing dividend yield of 0.51%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Information Technology sector--about 46.20% of the portfolio. Consumer Discretionary and Telecom round out the top three.
Looking at individual holdings, Microsoft Corp (MSFT) accounts for about 10.69% of total assets, followed by Apple Inc (AAPL) and Amazon Com Inc (AMZN).
The top 10 holdings account for about 46.59% of total assets under management.
Performance and Risk
IWF seeks to match the performance of the Russell 1000 Growth Index before fees and expenses. The Russell 1000 Growth Index measures the performance of the large-capitalization growth sector of the U.S. equity market.
The ETF has lost about -4.18% so far this year and is up about 23.13% in the last one year (as of 01/13/2022). In the past 52-week period, it has traded between $230.04 and $309.52.
The ETF has a beta of 1.02 and standard deviation of 23.85% for the trailing three-year period, making it a medium risk choice in the space. With about 505 holdings, it effectively diversifies company-specific risk.
IShares Russell 1000 Growth ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, IWF is a reasonable option for those seeking exposure to the Style Box - Large Cap Growth area of the market. Investors might also want to consider some other ETF options in the space.
The Vanguard Growth ETF (VUG) and the Invesco QQQ (QQQ) track a similar index. While Vanguard Growth ETF has $86.67 billion in assets, Invesco QQQ has $208.94 billion. VUG has an expense ratio of 0.04% and QQQ charges 0.20%.
Passively managed ETFs are becoming increasingly popular with institutional as well as retail investors due to their low cost, transparency, flexibility and tax efficiency. They are excellent vehicles for long term investors.
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 Russell 1000 Growth ETF (IWF): 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
Invesco QQQ (QQQ): ETF Research Reports
Vanguard Growth ETF (VUG): ETF Research Reports
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