Equity: U.S. - Large Cap Growth

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  • Overview
  • Efficiency
  • Tradability
  • Fit

ETF.com Insight

Profound fundamental differences exist among competing US large-cap growth ETFs. Index providers have their own style methodologies–unique selection parameters and weighting schemesThe segment is currently dominated by three funds: IWF, IVW and VUG. to create growth portfolios. For example, in determining a “growth” stock Russell considers a stock’s projected EPS growth and historical sales growth trend, while MSCI also considers a stocks historical EPS growth and current internal growth. Weighting schemes vary too: Many funds use the classic market-cap weighting scheme but others stray to tiered or proprietary weighting schemes.

While most indexes allow overlap of a company’s weighting between their growth and value indexes, there are a few pure growth indexes that eliminate any overlap between style baskets–a company is either growth, core or value. The Guggenheim S&P 500 Pure Growth (RPG) is one such “pure growth” fund. Its underlying index selects and weights stocks with S&P’s proprietary “growth scores.” Because of its unique “pure growth” selection and weighting scheme, solid tracking and ease of access, RPG is our Analyst Pick for the US large-cap growth segment.
Another differentiator between the ETFs in this segment is their size cutoffs: Some funds include hefty exposure to companies we consider mid-caps while others hew more tightly to large cap securities. The spectrum ranges from funds like PXLG and IWY that hold mostly mega-cap securities to FTC or SYG which allocates 20% or more of assets to mid-cap securities.

By assets, the segment is currently dominated by three funds: the iShares Russell 1000 Growth (IWF), iShares S&P 500 Growth (IVW), and Vanguard Growth (VUG). Combined, they hold about 90% of segment assets, with IWFs $30B in AUM accounting for nearly 40% alone. All three provide a cost-efficient way to gain broad exposure to growth stocks in the Russell 1000 Index, S&P 500 Index and CSRP US Large-Cap Index. New entrants are gaining traction here, with the Schwab U.S. Large Cap Growth (SCHG) and iShares Russell 200 Growth (IWY) making significant strides on the asset front. SCHG charges only 7 bps annually, the lowest in the segment.

Like our MSCI benchmark, a majority of funds have heavy exposures to tech and are often top-heavy in mega-caps like Apple, IBM, Microsoft and Google. A few funds stray though, such as RPG whose top 10 holdings skip most of the tech giants. (Insight updated 01/23/17)

All Funds (19)

IWY $698.21 M 698207510 Heavy in tech

A 95
E
97
97
T
96
96
F
95
95

IVW $15.16 B 15161410020 Tilts towards health care

A 95
E
99
99
T
100
100
F
95
95

VOOG $1.25 B 1246347750 Tilts towards health care

A 95
E
97
97
T
97
97
F
95
95

SPYG $693.49 M 693492745.23073 Pulls from S&P 500

A 95
E
98
98
T
92
92
F
95
95

MGK $2.39 B 2389361488.05 Best Fit to our benchmark

A 94
E
99
99
T
99
99
F
94
94

IWF $31.9 B 31895670100 Most popular in the segment

A 93
E
98
98
T
99
99
F
93
93

VONG $859.2 M 859202432.43 Large holdings base

A 93
E
98
98
T
98
98
F
93
93

VUG $23.78 B 23784840428.72 A solid choice for long term investors

A 92
E
99
99
T
100
100
F
92
92

JKE $735.14 M 735144720 Tilts heavily toward tech

A 88
E
97
97
T
92
92
F
88
88

SCHG $3.46 B 3459979267.2 Cheapest in the segment

A 87
E
100
100
T
99
99
F
87
87

PWB $396.65 M 396648900 Concentrated in consumer cyclicals

A 80
E
91
91
T
96
96
F
80
80

RPG $1.84 B 1841661034.136 Solid tracking and easy access

A 73
E
95
95
T
99
99
F
73
73

FTC $602.41 M 602412100.402 Alpha-seeking

A 71
E
88
88
T
97
97
F
71
71

PXLG $131.69 M 131689000 changed indexes May 2015

B 76
E
92
92
T
68
68
F
76
76

SYG $12.93 M 12932628.8 Actively Managed

C 82
E
78
78
T
62
62
F
82
82

NULG $5.1 M 5096140 N/A

N/A 0
E
0
-1
T
0
-1
F
0
-1

CFGE $27.37 M 27374400.36 poor liquidity so far

D 75
E
69
69
T
55
55
F
75
75

RPX $12.38 M 12375412.5 Closure Risk

D 85
E
69
69
T
64
64
F
85
85

RWG $5.94 M 5943396.2 Actively-managed

D 63
E
69
69
T
52
52
F
63
63

ETF.com Grade as 01/19/17

Equity: U.S. - Large Cap Growth

Performance Dispersion
Performance  [as of 01/20/17] 1 Month 3 Month YTD 1 Year 3 Years 5 Years 10 Years
Benchmark: MSCI USA Large Growth1.58%5.01%3.13%19.79%9.83%14.20%--
A 94.69426IWY698207510IWYiShares Russell Top 200 Growth ETF1.13%4.84%2.56%19.11%10.42%14.32%--
A 94.684534IVW15161410020IVWiShares S&P 500 Growth ETF0.93%4.33%2.41%19.58%9.80%13.42%7.16%
A 94.668556VOOG1246347750VOOGVanguard S&P 500 Growth Index Fund0.86%4.28%2.40%19.69%9.84%14.15%--
A 94.518987SPYG693492745.23073SPYGSPDR S&P 500 Growth ETF0.98%4.37%2.44%19.78%9.81%14.11%8.52%
A 94.311935MGK2389361488.05MGKVanguard Mega Cap Growth Index Fund1.67%4.10%3.03%20.29%9.06%13.95%--
A 92.605072IWF31895670100IWFiShares Russell 1000 Growth ETF1.07%5.07%2.55%20.25%9.39%13.83%8.20%
A 92.510639VONG859202432.43VONGVanguard Russell 1000 Growth Index Fund1.12%5.02%2.57%20.34%9.51%13.89%--
A 92.221836VUG23784840428.72VUGVanguard Growth Index Fund1.59%3.99%2.92%20.46%8.75%13.64%8.23%
A 87.594127JKE735144720JKEiShares Morningstar Large-Cap Growth ETF1.60%3.70%3.00%14.79%8.79%13.82%7.64%
A 86.756082SCHG3459979267.2SCHGSchwab U.S. Large-Cap Growth ETF1.43%4.98%3.01%21.86%9.55%14.25%--
A 79.561032PWB396648900PWBPowerShares Dynamic Large Cap Growth Portfolio0.71%4.55%2.07%13.80%8.73%15.05%6.93%
A 73.362143RPG1841661034.136RPGGuggenheim S&P 500 Pure Growth ETF0.46%2.91%2.19%17.80%6.99%14.09%9.59%
A 70.503905FTC602412100.402FTCFirst Trust Large Cap Growth AlphaDEX Fund1.23%3.13%2.73%14.67%8.06%13.15%--
B 75.545141PXLG131689000PXLGPowerShares Russell Top 200 Pure Growth Portfolio1.64%3.95%3.27%13.35%8.16%11.98%--
C 81.610355SYG12932628.8SYGSPDR MFS Systematic Growth Equity ETF1.84%5.67%2.59%19.85%12.00%----
N/A 0NULG5096140NULGNuShares ESG Large-Cap Growth ETF1.32%--1.39%--------
D 75.108817448849CFGE27374400.36CFGECalamos Focus Growth ETF4.99%1.95%-0.95%-6.82%------
D 84.614002086017RPX12375412.5RPXColumbia Large Cap Growth-8.67%-6.54%-10.79%0.64%13.80%8.10%--
D 62.966077322475RWG5943396.2RWGColumbia Select Large Cap Growth-13.66%-11.13%-14.66%-5.93%7.40%4.51%--
All returns over 1 year are annualized. All returns are total returns unless otherwise stated.

ETF.com Efficiency Insight

IWF, VUG and IVW are the three most established funds, holding a significant portion of the segments total assets under their belts. As expected, all three funds have high EfficiencyThe lowest scores in Efficiency are seen in alpha-seekers scores, with VUG being the cheapest of the three at 9 bps and boasting the segment's best tracking (-8 bps). IWF and IVW charge 20 bps and 18 bps, respectively, and both track their indexes exceptionally well. While Vanguard’s newly launched Russell 1000 Index (VONG) and S&P 500 Growth (VOOG) charge 3-5 bps lower than IWF and IVW and track the same underlying indexes, investors have so far shrugged off these cost differences, continuing to favor the liquidity leaders. While Vanguard tends to carry some of the lowest-cost funds, they disclose their holdings on a monthly basis with a 2-week lag, which is not ideal (we like to see daily holdings) and detracts slightly from their Efficiency score.

SCHG performs impressively in Efficiency, charging a segment low expense ratio of 7 bps with excellent tracking as well (-10 bps). Propelled by cost advantage and a solid tracking record, SCHG quickly became the fastest growing fund in a crowded segment (approaching $2B in AUM).

Some of the lowest scores in Efficiency are seen in alpha-seekers like FTC and actively managed funds RWG and SYG. Investors pay hefty annual fees for their better-mousetrap schemes: 70 bps for FTC, 80 bps for RWG, and 60 bps for SYG. To the dismay of tax-conscious investors, RWG paid out $2.6 per share in combined short- and long-term capital gains in 2011. With 15 funds in the segment and over 90% of all assets being held by just three funds, several funds lag significantly in assets. Four funds are below the $150M mark in AUM, with two of those funds holding less than $10M. Investors should closely monitor AUM growth for RWG and SYG. Currently, RWG ($9M in AUM) and SYG ($3M) are at high risk for closure. (Insight updated 01/23/17)

All Funds (19)

99
98.985479
99
98.936659
99
98.624433
98
98.339966
98
98.283696
98
97.941203
97
97.418049
97
97.176865
97
96.540575
95
94.510486
92
92.086844
91
90.914988
88
88.29644
78
78.032924
100
100
N/A
0
69
69.287599671735
69
69.012265636132
69
68.625752652297

ETF.com Grade as 01/19/17

Equity: U.S. - Large Cap Growth

Tracking Difference (12 Month)

Ticker Expense Ratio Median Max. Upside Max. Downside Max LT/ST Cap Gains Rate Rule Legal Structure Fund Closure Risk Efficiency
IWY iShares Russell Top 200 Growth ETF 0.20% -0.20% -0.17% -0.25% 20.00% / 39.60% Low 97.176865
VONG Vanguard Russell 1000 Growth Index Fund 0.12% -0.12% -0.09% -0.14% 20.00% / 39.60% Low 97.941203
JKE iShares Morningstar Large-Cap Growth ETF 0.25% -0.22% -0.18% -0.27% 20.00% / 39.60% Low 96.540575
VOOG Vanguard S&P 500 Growth Index Fund 0.15% -0.14% -0.11% -0.17% 20.00% / 39.60% Low 97.418049
MGK Vanguard Mega Cap Growth Index Fund 0.07% -0.06% -0.03% -0.10% 20.00% / 39.60% Low 98.936659
VUG Vanguard Growth Index Fund 0.08% -0.06% -0.02% -0.08% 20.00% / 39.60% Low 98.985479
PWB PowerShares Dynamic Large Cap Growth Portfolio 0.57% -0.62% -0.54% -0.71% 20.00% / 39.60% Low 90.914988
NULG NuShares ESG Large-Cap Growth ETF 0.35% -- -- -- -- / -- Low 0
PXLG PowerShares Russell Top 200 Pure Growth Portfolio 0.39% -0.50% -0.46% -0.54% 20.00% / 39.60% Low 92.086844
RPG Guggenheim S&P 500 Pure Growth ETF 0.35% -0.34% -0.29% -0.43% 20.00% / 39.60% Low 94.510486
FTC First Trust Large Cap Growth AlphaDEX Fund 0.62% -0.68% -0.54% -0.82% 20.00% / 39.60% Low 88.29644
SCHG Schwab U.S. Large-Cap Growth ETF 0.04% -0.04% -0.02% -0.09% 20.00% / 39.60% Low 100
IVW iShares S&P 500 Growth ETF 0.18% -0.16% -0.15% -0.19% 20.00% / 39.60% Low 98.624433
SPYG SPDR S&P 500 Growth ETF 0.15% -0.14% -0.09% -0.21% 20.00% / 39.60% Low 98.339966
IWF iShares Russell 1000 Growth ETF 0.20% -0.17% -0.15% -0.20% 20.00% / 39.60% Low 98.283696
SYG SPDR MFS Systematic Growth Equity ETF 0.60% -- -- -- 20.00% / 39.60% Medium 78.032924
CFGE Calamos Focus Growth ETF -- -- -- 20.00% / 39.60% Closing 69.287599671735
RPX Columbia Large Cap Growth -- -- -- 20.00% / 39.60% Closing 69.012265636132
RWG Columbia Select Large Cap Growth -- -- -- 20.00% / 39.60% Closing 68.625752652297

ETF.com Tradability Insight

Five funds in this segment have perfect or nearly perfect scores - IVW, VUG, SCHG, MGK and IWF. But when it comes to sheer liquidity, IWF is in a class of its own. On most days, IWF tradesWhen it comes to sheer liquidity, IWF is in a class of its own over $200M with an average spread of just 1 bp. For institutions and large traders whose primary concern is liquidity, IWF is the go-to fund. While falling slightly behind IWF, IVW and VUG separate themselves from the remaining funds, trading at impressive daily volumes—both over $80M. IVW and VUG also trade with extremely tight spreads of 2 bps–some of the tightest in the segment.

Our Analyst Pick, RPG, has decent on-screen liquidity (over $10M median daily volume) for retail investors with an acceptable average spread at 5 bps. It also has excellent block liquidity for institutional investors trading multiple creation units at a time.

Investors should use caution when trading the smaller and less liquid funds. Many of them trade less than $1M, while a few don’t trade at all on many days. SYG, RWG and CFGE are the most illiquid with average spreads of 35 bps or more. (Insight updated 01/23/17)

All Funds (19)

100
99.649131
100
99.569672
99
99.355286
99
99.11728
99
99.034277
99
98.763892
98
98.438736
97
97.417846
97
96.832439
96
96.195063
96
95.704296
92
92.371004
92
91.871032
68
67.54239
62
62.000446
N/A
0
55
54.751744763297
64
64.193491424364
52
52.412591326416

ETF.com Grade as 01/19/17

Equity: U.S. - Large Cap Growth

Ticker Median Daily Volume ($) Average Spread Creation Unit/Day Market Hours Overlap Underlying Volume/Unit % Creation Cost Per Unit (%) Impediment to Creations Score - Tradability
MGK Vanguard Mega Cap Growth Index Fund $7.7 M 0.04% 3.46 100.00% 0.01% 0.03% None 98.763892
PWB PowerShares Dynamic Large Cap Growth Portfolio $1.15 M 0.07% 0.71 100.00% 0.01% 0.03% None 96.195063
PXLG PowerShares Russell Top 200 Pure Growth Portfolio $86.3 K 0.16% 0.04 100.00% 0.01% 0.03% None 67.54239
RPG Guggenheim S&P 500 Pure Growth ETF $10.91 M 0.02% 2.58 100.00% 0.03% 0.02% None 99.11728
SCHG Schwab U.S. Large-Cap Growth ETF $16.23 M 0.04% 5.83 100.00% 0.01% 0.02% None 99.034277
SPYG SPDR S&P 500 Growth ETF $3.33 M 0.19% 0.62 100.00% 0.01% 0.02% None 92.371004
SYG SPDR MFS Systematic Growth Equity ETF $32.89 K 0.30% 0.01 100.00% 0.03% 0.00% None 62.000446
VONG Vanguard Russell 1000 Growth Index Fund $3.38 M 0.06% 1.24 100.00% 0.00% 0.02% None 98.438736
VOOG Vanguard S&P 500 Growth Index Fund $5.39 M 0.11% 1.99 100.00% 0.00% 0.02% None 96.832439
FTC First Trust Large Cap Growth AlphaDEX Fund $2.68 M 0.09% 1.07 100.00% 0.01% 0.02% None 97.417846
VUG Vanguard Growth Index Fund $85.66 M 0.02% 30.26 100.00% 0.01% 0.02% None 99.569672
IVW iShares S&P 500 Growth ETF $94.51 M 0.02% 15.42 100.00% 0.01% 0.01% None 99.649131
NULG NuShares ESG Large-Cap Growth ETF $0 0.19% 0.00 100.00% 0.01% 0.04% None 0
IWF iShares Russell 1000 Growth ETF $225.07 M 0.01% 42.83 100.00% 0.01% 0.03% None 99.355286
IWY iShares Russell Top 200 Growth ETF $1.86 M 0.10% 0.65 100.00% 0.01% 0.01% None 95.704296
JKE iShares Morningstar Large-Cap Growth ETF $2.25 M 0.17% 0.37 100.00% 0.02% 0.00% None 91.871032
CFGE Calamos Focus Growth ETF $0 0.00 100.00% 0.00% 0.11% None 54.751744763297
RPX Columbia Large Cap Growth $75.28 K 0.03 100.00% 0.01% 0.02% None 64.193491424364
RWG Columbia Select Large Cap Growth $4.73 K 0.00 100.00% 0.04% 0.02% None 52.412591326416

ETF.com/ Block Liquidity

SCHG
5
4
3
2
1
SPYG
5
4
3
2
1
SYG
5
4
3
2
1
VONG
5
4
3
2
1
VOOG
5
4
3
2
1
VUG
5
4
3
2
1
FTC
5
4
3
2
1
IVW
5
4
3
2
1
IWF
5
4
3
2
1
IWY
5
4
3
2
1
JKE
5
4
3
2
1
MGK
5
4
3
2
1
PWB
5
4
3
2
1
PXLG
5
4
3
2
1
RPG
5
4
3
2
1
NULG
5
4
3
2
1
CFGE
5
4
3
2
1
RPX
5
4
3
2
1
RWG
5
4
3
2
1

This measurement shows how easy it is to trade 25,000 shares of each ETF.

ETF.com Fit Insight

In comparing Fit scores between funds in the US Large Cap Growth segment, remember that each index provider has its own style methodology, which can lead to significant tilt and portfolioStyle methodologies can lead to significant tilt and portfolio differences holdings discrepancies against our MSCI benchmark. While most indexes allow companies with growth and value characteristics to overlap their weightings between growth and value indexes, some implement pure style strategies that eliminate overlap by allocating each company’s weight to one of growth, core or value.

Initial selection universes also impact the final portfolios; for example, IWF holds over 600 names, as it selects growth stocks from the Russell 1000 Index, whereas IWY only holds around 130 names, as it pulls growth stocks from a smaller universe–the Russell Top 200 Index. Despite its underlying index change in April 2013, MGK continues to be the segment leader in Fit due to a high level of portfolio overlap and similar weighted avg. market cap. MGK now tracks a CRSP index which selects stocks based on several growth factors, including historical and future EPS growth, sales per share growth, investment-to-assets ratio and return on assets. It makes our Opportunities List as a result of its unique growth factor screen.

Funds tracking Russell and S&P indexes, like segment leaders IWF and IVW, have minor differences in portfolio composition. For example, S&P-based funds tend to have a larger healthcare tilt vs. our benchmark. Still, most growth funds have one thing in common—heavy tech exposure as giants like Apple, IBM, Microsoft, and Google often dominate top holdings.

RPG, a pure growth fund based on the S&P 500 Index, also has a very different portfolio from its peers due to its unique selection and weighting scheme based on growth scores. RPG is heavy in financials, consumer cyclicals, and healthcare with names like D.R. Horton, Southwest Airlines and Lennar among its top holdings.

The true alpha-seekers are another story. By design they deviate substantially from the neutral benchmark.  RWG, one of the three actively managed funds in the segment, holds the lowest Fit score thanks to its inclusion of ADRs of foreign companies listed in the US like Chinese search engine Baidu.  (Insight updated 01/23/17)

All Funds (19)

95
94.69426
95
94.684534
95
94.668556
95
94.518987
94
94.311935
93
92.605072
93
92.510639
92
92.221836
88
87.594127
87
86.756082
82
81.610355
80
79.561032
76
75.545141
73
73.362143
71
70.503905
N/A
0
75
75.108817448849
85
84.614002086017
63
62.966077322475

ETF.com Grade as 01/19/17

Equity: U.S. - Large Cap Growth