Is iShares Core S&P U.S. Growth ETF (IUSG) a Strong ETF Right Now?

Making its debut on 07/24/2000, smart beta exchange traded fund iShares Core S&P U.S. Growth ETF (IUSG) provides investors broad exposure to the Style Box - All Cap Growth category of the market.

What Are Smart Beta ETFs?

The ETF industry has long been dominated by products based on market cap weighted indexes, a strategy created to reflect the market or a particular market segment.

Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.

There are some investors, though, who think it's possible to beat the market with great stock selection; this group likely invests in another class of funds known as smart beta, which track non-cap weighted strategies.

These indexes attempt to select stocks that have better chances of risk-return performance, based on certain fundamental characteristics or a combination of such characteristics.

The smart beta space gives investors many different choices, from equal-weighting, one of the simplest strategies, to more complicated ones like fundamental and volatility/momentum based weighting. However, not all of these methodologies have been able to deliver remarkable returns.

Fund Sponsor & Index

The fund is managed by Blackrock, and has been able to amass over $16.87 billion, which makes it the largest ETF in the Style Box - All Cap Growth. This particular fund, before fees and expenses, seeks to match the performance of the S&P 900 Growth Index.

The S&P 900 Growth Index measures the performance of the large and mid-capitalization growth sector of the U.S. equity market.

Cost & Other Expenses

Expense ratios are an important factor in the return of an ETF and in the long-term, cheaper funds can significantly outperform their more expensive cousins, other things remaining the same.

With one of the least expensive products in the space, this ETF has annual operating expenses of 0.04%.

It's 12-month trailing dividend yield comes in at 0.91%.

Sector Exposure and Top Holdings

Most ETFs are very transparent products, and disclose their holdings on a daily basis. ETFs also offer diversified exposure, which minimizes single stock risk, though it's still important for investors to research a fund's holdings.

This ETF has heaviest allocation in the Information Technology sector - about 45.20% of the portfolio. Consumer Discretionary and Telecom round out the top three.

Taking into account individual holdings, Microsoft Corp (MSFT) accounts for about 12.30% of the fund's total assets, followed by Apple Inc (AAPL) and Nvidia Corp (NVDA).

The top 10 holdings account for about 54.54% of total assets under management.

Performance and Risk

The ETF has added about 12.46% so far this year and it's up approximately 33.11% in the last one year (as of 04/08/2024). In the past 52-week period, it has traded between $87.77 and $117.92.

The ETF has a beta of 1.05 and standard deviation of 20.83% for the trailing three-year period, making it a medium risk choice in the space. With about 477 holdings, it effectively diversifies company-specific risk.

Alternatives

IShares Core S&P U.S. Growth ETF is an excellent option for investors seeking to outperform the Style Box - All Cap Growth segment of the market. There are other ETFs in the space which investors could consider as well.

Fidelity Blue Chip Growth ETF (FBCG) tracks ---------------------------------------- and the iShares Morningstar Growth ETF (ILCG) tracks MORNINGSTAR US LARGE-MID CP BRD GRWTH ID. Fidelity Blue Chip Growth ETF has $1.44 billion in assets, iShares Morningstar Growth ETF has $2.09 billion. FBCG has an expense ratio of 0.59% and ILCG charges 0.04%.

Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Style Box - All Cap Growth.

Bottom Line

To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.

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iShares Core S&P U.S. Growth ETF (IUSG): ETF Research Reports

Apple Inc. (AAPL) : Free Stock Analysis Report

Microsoft Corporation (MSFT) : Free Stock Analysis Report

NVIDIA Corporation (NVDA) : Free Stock Analysis Report

Fidelity Blue Chip Growth ETF (FBCG): ETF Research Reports

iShares Morningstar Growth ETF (ILCG): ETF Research Reports

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Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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