IWO: Less Tech Compared To Large Growth

seekingalpha07-09

Bearish on large-cap stocks, bullish on small caps, and value over growth.Consider iShares Russell 2000 Growth ETF for exposure to small-cap U.S. equities with growth characteristics.The fund offers ...

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}\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nIWO: Less Tech Compared To Large Growth\n</h2>\n\n<h4 class=\"meta\">\n\n\n2024-07-09 04:04 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4703008-iwo-less-tech-compared-to-large-growth><strong>seekingalpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Bearish on large-cap stocks, bullish on small caps, and value over growth.Consider iShares Russell 2000 Growth ETF for exposure to small-cap U.S. equities with growth characteristics.The fund offers ...</p>\n\n<a href=\"https://seekingalpha.com/article/4703008-iwo-less-tech-compared-to-large-growth\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"FDN","symbol_name":"First Trust Dow Jones Internet I","start_time":0,"source_url":"https://seekingalpha.com/article/4703008-iwo-less-tech-compared-to-large-growth","article_id":"2450608760","we_media_id":null,"thumbnails":["https://static.seekingalpha.com/cdn/s3/uploads/getty_images/168259334/image_168259334.jpg"],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2450608760","pubTimestamp":1720469052,"sourceInfo":{"source_id":"seekingalpha","name":"Seeking Alpha"},"weMediaInfo":null,"summary":"Bearish on large-cap stocks, bullish on small caps, and value over growth.Consider iShares Russell 2000 Growth ETF for exposure to small-cap U.S. equities with growth characteristics.The fund offers d","collect":0,"end_time":0,"defaultTopTitle":"seekingalpha.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"FDN":"First Trust Dow Jones Internet I","IJT":"标普小盘成长股600ETF-iShares","IWO":"罗素2000成长股指数ETF","BK4585":"ETF&股票定投概念","IWF":"罗素1000成长指数ETF-iShares","BK4550":"红杉资本持仓","BK4588":"碎股","BK4581":"高盛持仓","VBK":"美国小盘成长股ETF-Vanguard"},"translate_title":"IWO：与大幅增长相比，技术较少","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"IJT":1,"IWF":1,"IWO":1,"VBK":1,"FDN":0.9},"content_text":"Bearish on large-cap stocks, bullish on small caps, and value over growth.Consider iShares Russell 2000 Growth ETF for exposure to small-cap U.S. equities with growth characteristics.The fund offers diversification, sector balance, and the potential for high rates of capital appreciation in emerging industries.posteriori Allow me to set the stage early on. I'm bearish on large-cap stocks relative to mid-caps and small-caps. I'm also (largely) bearish on growth over value. Why? Because growth tends to be dominated by tech stocks (at least in large-cap averages). I'd much rather own from a long-term perspective the laggards that have not participated in the same degree as large-cap tech stocks in this bull market, which means small caps with a more diverse sector allocation. If you agree, you may want to consider the iShares Russell 2000 Growth ETF (NYSEARCA:IWO). This fund tries to match the performance of the Russell 2000 Growth Index, a collection of small-cap U S equities with growth characteristics. Now - as much as I'm bearish on growth, there are some very good things going for this fund. The main thing is that, although it has the tech, it isn't the largest allocation like you see in large-cap growth averages. A Look At The Holdings The biggest difference between large-cap growth and small-cap growth is diversification. IWO has a nice mix of stocks with no position making up more than 0.88% of the portfolio. This is very different from what you see in funds like the iShares Russell 1000 Growth ETF (IWF) which has huge com risk in the top 10. iShares.com The fund has more than 1,136 holdings, with a P/E Ratio of 22.62. Is it rich? Sure. But growth in general is, and at least this is well diversified and eliminates idiosyncratic risk. Sector Composition and Weightings I mentioned before that tech dominates large-cap growth averages. It does not however dominate anywhere to the same degree of small-cap growth. Healthcare is actually the largest sector at 24.99%, followed by industrials at 21.41%, and then tech coming in third at 20.48%. I'm quite bullish on healthcare on a relative basis and like the overall sector weightings here. I think there's a lot of room for small-cap healthcare (particularly biotechs) to outperform in the years ahead. iShares.com Peer Comparison Two funds worth comparing IWO against include the Vanguard Small-Cap Growth Index Fund ETF Shares (VBK) and the iShares S&P Small-Cap 600 Growth ETF (IJT). Both VBK and IJT track different indices than IWO (Russell 2000 Growth vs. CRSP US Small Cap Growth and S&P Small-Cap). When we look at the performance of the three funds, we find that IWO has lagged. Much of this has to do with the smaller healthcare allocations in VBK and IJT relative to IWO, given that healthcare has lagged badly in this cycle. Again - I think that will change in the years ahead. StockCharts.com Pros and Cons When it comes to the U.S. equity market's small-cap growth corner, there are plenty of reasons for optimism - and more than a few for concern. On the positive side, small-cap growth firms can see large increases in market share and sales each year, leading to increased potential for high rates of capital appreciation. Yes, they've struggled in the higher for longer environment, but those that survive will thrive, especially as we near a Fed cutting cycle. In addition, some growth portfolios can provide exposure to emerging industries and disruptive technologies. Small growth stocks include the most dynamic companies driving innovation in new and exciting industries, so investors have the potential to participate in the creation of new leaders as these industries evolve. The negative? Small-cap growth stocks exhibit higher volatility than large-cap stocks. Because smaller companies are less mature, they're more sensitive to cyclical conditions in the economy as well as to shifts in the investment market overall. Compared to larger firms, small firms might have less established business practices and strategies, less resources, and more competition, which creates greater risk for investors. Conclusion  I'd favor small-value over small-growth here if I could only choose one, but overall I think the iShares Russell 2000 Growth ETF (IWO) provides a good opportunity for small-cap growth exposure in the US equity market, especially if you're bullish on healthcare. Diversification, sector balance, and a cycle that might soon favor small caps over large caps make this a fund to consider.","kind":"highlight","is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"0","news_tag":"","news_rank":0,"symbols":[],"gpt_button":1},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.29.3","shortVersion":"4.29.3","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2450608760"}