Should iShares Russell MidCap Growth ETF (IWP) Be on Your Investing Radar?
Designed to provide broad exposure to the Mid Cap Growth segment of the US equity market, the iShares Russell MidCap Growth ETF (IWP) is a passively managed exchange traded fund launched on 07/17/2001.
The fund is sponsored by Blackrock. It has amassed assets over $14.13 billion, making it the largest ETFs attempting to match the Mid Cap Growth segment of the US equity market.
Why Mid Cap Growth
Mid cap companies, with market capitalization in the range of $2 billion and $10 billion, offer investors many things that small and large companies don't, including less risk and higher growth opportunities. These types of companies, then, have a good balance of stability and growth potential.
Growth stocks have higher than average sales and earnings growth rates. While these are expected to grow faster than the broader market, they also have higher valuations. Also, growth stocks are a type of equity that carries more risk compared to others. 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 0.23%, putting it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 0.35%.
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 36.10% of the portfolio. Healthcare and Consumer Discretionary round out the top three.
Looking at individual holdings, Dexcom Inc (DXCM) accounts for about 1.38% of total assets, followed by Idexx Laboratories Inc (IDXX) and Crowdstrike Holdings Inc Class A (CRWD).
The top 10 holdings account for about 11.74% of total assets under management.
Performance and Risk
IWP seeks to match the performance of the Russell MidCap Growth Index before fees and expenses. The Russell Midcap Growth Index measures the performance of the mid-capitalization growth sector of the U.S. equity market. It is a subset of the Russell Midcap Index, which measures the performance of the mid-capitalization sector of the U.S. equity market & approximately 47% of the total market value of the Russell Midcap Index.
The ETF has lost about -11.72% so far this year and is down about -4.66% in the last one year (as of 01/20/2022). In the past 52-week period, it has traded between $96.94 and $123.28.
The ETF has a beta of 1.07 and standard deviation of 24.92% for the trailing three-year period, making it a medium risk choice in the space. With about 396 holdings, it effectively diversifies company-specific risk.
Alternatives
IShares Russell MidCap 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, IWP is an outstanding option for investors seeking exposure to the Style Box - Mid Cap Growth segment of the market. There are other additional ETFs in the space that investors could consider as well.
The iShares S&P MidCap 400 Growth ETF (IJK) and the Vanguard MidCap Growth ETF (VOT) track a similar index. While iShares S&P MidCap 400 Growth ETF has $7.76 billion in assets, Vanguard MidCap Growth ETF has $11.17 billion. IJK has an expense ratio of 0.17% and VOT charges 0.07%.
Bottom-Line
While an excellent vehicle for long term investors, passively managed ETFs are a popular choice among institutional and retail investors due to their low costs, transparency, flexibility, and tax efficiency.
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 Russell MidCap Growth ETF (IWP): ETF Research Reports
DexCom, Inc. (DXCM) : Free Stock Analysis Report
IDEXX Laboratories, Inc. (IDXX) : Free Stock Analysis Report
Vanguard MidCap Growth ETF (VOT): ETF Research Reports
iShares S&P MidCap 400 Growth ETF (IJK): ETF Research Reports
CrowdStrike (CRWD) : Free Stock Analysis Report
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