Market Overview

S&P Touts A Growth ETF Led By Apple


With consumer discretionary and technology playing big parts in the 2012 rally, it's no surprise to see many ETFs with the "growth" label threatening new 52-week highs on an almost daily basis. One of those funds is iShares S&P 500 Growth Index Fund (NYSE: IVW), which as of this writing, is up almost 8% year-to-date and is sitting less than a nickel below its 52-week high.

In a note out today, S&P Capital IQ says it has "favorable top-down views" of the consumer discretionary, industrial and consumer staples sectors while noting the iShares S&P 500 Growth Index Fund has significant allocations to that trio. S&P Capital IQ rates IVW "overweight."

The "iShares S&P 500 Growth Index Fund earns an Overall Overweight ETF ranking from S&P Capital IQ, with favorable assessments in the Performance Analytics, Risk Considerations and Cost Factors categories of our methodology," the research firm said in the note.

With an expense ratio of just 0.18%, IVW has over $6.8 billion in assets under management and is home to almost 280 stocks. Seven Dow components are found in IVW's top-10 holdings, but Apple (Nasdaq: AAPL) is the largest individual holding with a weight of 7.16%.

We've previously mentioned other growth ETFs with solid Apple exposure among them is the Vanguard Growth ETF (NYSE: VUG).

S&P says of IVW's top-10 holdings "nine of the 10 are currently considered attractive based on S&P STARS and six are considered attractive based on S&P Fair Value. Some of the stocks that are appealing to S&P Capital IQ on both metrics include Apple, IBM (NYSE: IBM) and Philip Morris International (NYSE: PM).

Technology is the largest sector weight at 27% with health care next at 15% followed by staples at 13%. Energy, industrials and consumer discretionary all receive double-digit allocations as well.

"In comparison to all ETFs in our universe, IVW also earns a favorable score, with a standard deviation of 16.7. Within the Cost Factors analysis, we use the gross expense ratio, the bid/ask spread and the price to NAV of the ETF. IVW receives positive assessments for the first two inputs and a neutral for the third one, as the ETF recently was trading essentially in line with its $73 NAV," S&P said in the note.

IVW is one of 163 ETFs S&P Capital rates "overweight."

Posted-In: Analyst Color Long Ideas News Broad U.S. Equity ETFs Short Ideas Specialty ETFs Intraday Update Markets


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