ETF Spotlight: iShares Russell 1000 Growth

March 22nd at 11:00am by Tom Lydon

ETF Spotlight on iShares Russell 1000 Growth ETF (NYSEArca: IWF), part of an ongoing series.

Assets: $16.6 billion.

Objective: The iShares Russell 1000 Growth Index Fund tries to reflect the performance of the large-cap growth sector of the U.S. equity market as represented by the Russell 1000 Growth Index.

Holdings: Top holdings include: Apple (NasdaqGS: AAPL) 7.7%, Exxon Mobil (NYSE: XOM) 4.3%, International Business Machines (NYSE: IBM) 3.4%, Microsoft (NasdaqGS: MSFT) 3.2% and Google (NasdaqGS: GOOG) 2.2%.

What You Should Know:

  • BlackRock‘s iShares ETF division sponsors the fund.
  • IWF has an expense ratio of 0.20%.
  • The fund holds 586 securities and the top ten holdings make up 29.1% of the overall portfolio.
  • Sector allocations include: technology 27.4%, consumer discretionary 16.6%, producer durables 13.3%, energy 10.3%, health care 9.9%, consumer staples 9.8%, materials 5.9%, financials 5.9%, utilities 0.6% S-T Securities 0.2% and other 0.1%.
  • The ETF has a 30-day SEC yield of 1.24%.
  • The fund is up 3.5% over the past month, up 14.9% over the last three months and up 15.3% over the past year.
  • IWF is 10.0% above its 200-day exponential moving average.
  • “Despite the growth name, investors should not expect a nimble, high-risk portfolio filled with turbocharged growth stocks, as the market-cap weighting keeps this portfolio dominated by slower-growing titans,” according to Morningstar analyst Michael Rawson, CFA.
  • “The tendency for value stocks to outperform growth stocks over long periods of time, called the value premium, works against long-term investors in this fund,” Rawson added. “After years of underperformance following the collapse of the tech bubble, the growth index held up better than the value index through the financial crisis and over the past five years because of the underweighting in banking stocks.”

The Latest News:

  • Stock markets listlessly traded sideways Wednesday after tip-toeing through disappointing data on existing home sales, reports Jonathan Cheng for The Wall Street Journal.
  • “Every time you get a correction, there’s money waiting on the sidelines coming in,” Sean Kraus, chief investment officer at CitizensTrust, said in the article. “A lot of fund managers are looking to the end of the quarter, and what manager of a large-cap fund for example doesn’t want to have Apple in their portfolio?”
  • “There are always going to be negative concerns for the market, but the question is whether relative to expectations things are getting better or worse, and they’re clearly getting better,” Kraus added.
  • According to the Goldman Sachs Group, stocks will take a “steady upward trajectory” over the next couple of years since declines in economic growth are already priced into the markets, reports Rita Nazareth for Bloomberg.
  • “Given current valuations, we think it’s time to say a ‘long goodbye’ to bonds, and embrace the ‘long good buy’ for equities as we expect them to embark on an upward trend over the next few years,” Peter Oppenheimer, chief global equity strategist at Goldman Sachs, said in a report. [Schwab Says Equity ETFs Have Room to Run]

iShares Russell 1000 Growth ETF

For past stories in this series, visit our ETF Spotlight category.

Max Chen contributed to this article.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.

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