Market Overview

S&P Likes This Growth ETF (AAPL, IWF, VUG)


There's no shortage of exchange traded funds sporting the word "growth" in their names, but S&P Capital IQ is partial to the iShares Russell 1000 Growth Index Fund (NYSE: IWF), an ETF highlighted by the research firm in a recent note.

S&P Capital IQ rates the iShares Russell 1000 Growth Index Fund Oveweight, saying of the 12-year old ETF "In our view, part of IWF's appeal is that it ranks well in each of the S&P Capital IQ analytical categories for equity ETFs. In fact, as of March 27, it was one of only 30 equity ETFs in our ranking universe to have both an Overall ranking of Overweight, plus an Overweight ranking in each of our Performance Analytics, Risk Considerations and Cost Factors categories."

Home to almost 600 stocks, IWF has $16.6 billion in assets under management and charges an expense ratio of 0.2%. The ETF's top-10 holdings, which comprise 29.3% of the fund's overall weight, include Apple (Nasdaq: AAPL), Exxon Mobil (NYSE: XOM), International Business Machines (NYSE: IBM), Microsoft (Nasdaq: MSFT) and Google (Nadsaq: GOOG).

Technology names account for almost 28% of IWF's sector weight while consumer discretionary, producer durables and health care issues also get double-digit allocations.

Regarding risk considerations, S&P said this of IWF: "IWF receives a relatively favorable assessment from the holdings-based S&P Quality Ranking input, which puts a focus on consistency and growth of historical earnings and dividends. Also, there was a relatively favorable appraisal for three-year standard deviation, which measures the volatility of the ETF itself, and from a third analytic that is based on S&P Credit Ratings on companies owned by the ETF."

IWF is up about 14.4% year to date, helped primarily by its concentration in tech stocks and an almost 8% weight to Apple. The fund competes with Vanguard Growth ETF (NYSE: VUG), among others.

The Vanguard Growth ETF is up about 15% year-to-date and shares eight of the same top-10 holdings in common with IWF. VUG doesn't include Exxon or PepsiCo (NYSE: PEP) among its top-10 roster, but VUG does also feature Apple as its largest individual holding.

Tech names account for 31.6% of VUG's weight and the Vaguard offering is cheaper than its iShares rival with an expense ratio of 0.12%.

Posted-In: Analyst Color Long Ideas News Broad U.S. Equity ETFs Short Ideas After-Hours Center Markets Analyst Ratings


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