In contrast, IWF’s top sector weights include information technology 37.9%, consumer discretionary 18.0% and health care 13.0% while telecom is 1.0%. While the growth style’s heavy tilt toward technology has helped the ETF outperform this year, the 0.6% pullback in S&P 500 Information Technology Index and the weakness in tech companies over the past month have weighed on the growth style’s recent performance.
To put the disparate weightings between value and growth in perspective, the blended IWB includes 23.4% information technology, followed by financials 15.1%, health car 13.2% and consumer discretionary 12.4%.
Value stocks typically cover companies that trade at a lower price relative to fundamentals such as dividends earnings and sales, which are then considered undervalued by a value investor.
Consequently, along with looking at value-focused benchmark index-based ETF picks, like IWD, investors can also consider dividend ETF strategies as value plays, too. For example, the Vanguard High Dividend Yield ETF (NYSEArca: VYM), which increased 2.6% over the past month, includes a hefty 48% tilt toward the large-cap value style, followed by 23% blended large-cap and 14% large-cap growth.