The value factor might be the talk of the town, but growth can always be in vogue with the right ETF. Mid cap exposure has been one of the highlights in 2021. Apply that to the growth factor and you get the iShares Russell Mid-Cap Growth ETF (IWP).
IWP seeks to track the investment results of the Russell Midcap Growth Index, which measures the performance of the mid-capitalization growth sector of the U.S. equity market. The fund generally invests at least 90% of its assets in securities of the underlying index and in depositary receipts representing securities of the underlying index.
It may invest the remainder of its assets in certain futures, options and swap contracts, cash, and cash equivalents, as well as in securities not included in the underlying index, but which the advisor believes will help the fund track the underlying index.
“This ETF offers exposure to mid cap stocks that exhibit growth characteristics, making IWP a potentially useful tool for investors looking to fine tune their domestic equity exposure or implement a tilt towards a specific investment style,” an ETF Database analysis noted. “Investors constructing a long-term portfolio would be better off with a fund such as MDY or IJH that includes greater depth of holdings and a mix of various styles.”
“Growth strategies often come with biases towards specific sectors, and may outperform more broadly-based indexes in certain economic environments,” the analysis added. “It should be noted that there is often considerable overlap between IWP and its value counterpart IWS, the result of a methodology that uses a generous definition of growth stocks.”
How Does ‘IWP’ Stack Up to Its Value Equivalent?
The value equivalent of IWP is the iShares Russell Mid-Cap Value ETF (IWS). Looking at the one-year chart for both ETFs, IWS is slightly ahead thanks to a pullback in growth-oriented funds to start 2021.
Nonetheless, the disparity between both is just under 6%.
In the year-to-date chart, the value comeback is clearly apparent. IWS is up 12%, while IWP is languishing behind with a 3% loss.
Yet stretch the chart to 3 years and growth’s dominance becomes readily apparent.
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