Exchange Traded Funds (ETFs)

Growing with the Best U.S. Companies

This week’s exchange-traded fund (ETF), the iShares S&P 500 Growth ETF (IVW), is a one that grants its investors exposure to large-cap U.S. companies.

More specifically, IVW tracks an index that selects stocks exclusively from the S&P 500. Launched way back in May 2000, IVW is one of the most established and popular growth-focused ETFs on the market.

The fund selects companies based on three growth factors: sales growth, earnings growth and momentum. Currently, the fund has $19.08 billion in total assets and daily trading volume of around $83.39 million, making it extremely liquid. This liquidity allows investors of all sizes to trade IVW with ease.

Several other growth-focused funds, such as the Vanguard S&P 500 Growth ETF (VOOG), track the same index with a similarly low cost, but very few can match the liquidity and the trading ease of IVW.

Year to date, IVW has returned 16.07% to beat out the S&P 500’s return of 9.53%. Recently, IVW has been trading around $142. Analysts from Zacks Research see more upside and have set a price target of $152.50 for the fund.

The fund has a dividend yield of 1.30% and a relatively low expense ratio of 0.18%.

The fund’s top five holdings are Apple Inc. (AAPL), 7.14%; Microsoft Corp. (MSFT), 4.80%; Facebook Inc. A (FB), 3.41%; Amazon.com Inc. (AMZN), 3.23%; and Alphabet Inc. A (GOOGL), 2.37%. With 326 holdings, IVW is well diversified.

As with most growth funds, IVW has a heavy focus on technology with 36.34% of the fund’s money going to the IT sector. IVW then has around 16% each in consumer discretionary and health care, both of which are relatively fast-growing sectors.

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For those who seek long-term capital appreciation in their investments, the iShares S&P 500 Growth ETF (IVW) may be worth adding to your portfolio.

As always, I am happy to answer any of your questions about ETFs, so do not hesitate to send me an email. You just may see your question answered in a future ETF Talk.

Jim Woods

Jim Woods is a 20-plus-year veteran of the markets with varied experience as a broker, hedge fund trader, financial writer, author and newsletter editor. Jim is the editor of Successful Investing, the Bullseye Stock Trader, and The Deep Woods (formerly the Weekly ETF Report). His books include co-authoring, “Billion Dollar Green: Profit from the Eco Revolution,” and “The Wealth Shield: How to Invest and Protect Your Money from Another Stock Market Crash, Financial Crisis or Global Economic Collapse.” He’s also ghostwritten many books and articles, as well as edited content for some of the investment industry’s biggest luminaries. His articles have appeared on many leading financial websites, including StockInvestor.com, InvestorPlace.com, Main Street Investor, MarketWatch, Street Authority, Human Events and many others. Jim formerly worked with Investor’s Business Daily founder William J. O’Neil, helping to author training courses in the CANSLIM stock-picking methodology. The independent firm TipRanks rates Jim the No. 3 financial blogger in the world (out of more than 6,000). TipRanks calculates that, since 2012, he's made 361 successful recommendations out of 499 total, earning a success rate of 72% and a +15.3% average return per recommendation. He is known in professional and personal circles as “The Renaissance Man,” because his expertise includes such varied fields as composing and performing music; Western horsemanship, combat marksmanship, martial arts, auto racing and bodybuilding. Jim holds a BA in philosophy from the University of California, Los Angeles, and is a former U.S. Army paratrooper. A self-described “radical for capitalism,” he celebrates the virtue of making money from his Southern California horse ranch.