Designed to provide broad exposure to the Large Cap Growth segment of the US equity market, the iShares Russell 1000 Growth ETF (IWF Quick QuoteIWF - Free Report) is a passively managed exchange traded fund launched on 05/22/2000.

The fund is sponsored by Blackrock. It has amassed assets over $95.83 billion, making it one of the largest ETFs attempting to match the Large Cap Growth segment of the US equity market.

Why Large Cap Growth

Companies that fall in the large cap category tend to have a market capitalization above $10 billion. They tend to be stable companies with predictable cash flows and are usually less volatile than mid and small cap companies.

While growth stocks do boast higher than average sales and earnings growth rates, and they are expected to grow faster than the wider market, investors should note these kinds of stocks have higher valuations. Further, growth stocks have a higher level of volatility associated with them. Even though growth stocks are more likely to outperform their value counterparts in strong bull markets, value stocks have a record of delivering better returns in almost all markets than growth stocks.

Costs

When considering an ETF's total return, expense ratios are an important factor, and cheaper funds can significantly outperform their more expensive counterparts in the long term if all other factors remain equal.

Annual operating expenses for this ETF are 0.19%, making it one of the cheaper products in the space.

It has a 12-month trailing dividend yield of 0.54%.

Sector Exposure and Top Holdings

Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.

This ETF has heaviest allocation to the Information Technology sector--about 49.30% of the portfolio. Consumer Discretionary and Telecom round out the top three.

Looking at individual holdings, Apple Inc (AAPL Quick QuoteAAPL - Free Report) accounts for about 12.60% of total assets, followed by Microsoft Corp (MSFT Quick QuoteMSFT - Free Report) and Nvidia Corp (NVDA Quick QuoteNVDA - Free Report) .

The top 10 holdings account for about 59.7% of total assets under management.

Performance and Risk

IWF seeks to match the performance of the Russell 1000 Growth Index before fees and expenses. The Russell 1000 Growth Index measures the performance of the large-capitalization growth sector of the U.S. equity market.

The ETF return is roughly 20.73% so far this year and was up about 32% in the last one year (as of 09/13/2024). In the past 52-week period, it has traded between $256.94 and $382.76.

The ETF has a beta of 1.09 and standard deviation of 22.26% for the trailing three-year period, making it a medium risk choice in the space. With about 398 holdings, it effectively diversifies company-specific risk.

Alternatives

IShares Russell 1000 Growth ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, IWF is an excellent option for investors seeking exposure to the Style Box - Large Cap Growth segment of the market. There are other additional ETFs in the space that investors could consider as well.

The Vanguard Growth ETF (VUG Quick QuoteVUG - Free Report) and the Invesco QQQ (QQQ Quick QuoteQQQ - Free Report) track a similar index. While Vanguard Growth ETF has $136.02 billion in assets, Invesco QQQ has $283.80 billion. VUG has an expense ratio of 0.04% and QQQ charges 0.20%.

Bottom-Line

An increasingly popular option among retail and institutional investors, passively managed ETFs offer low costs, transparency, flexibility, and tax efficiency; they are also excellent vehicles for long term investors.

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.