IWY: Growth Not So Crowded Now

seekingalpha08-07

Richard Drury This week's drop has created buying opportunities, and growth stocks are one area I think could do quite well going forward. Funds like the iShares Russell Top 200 Growth ETF (NYSEARCA:...

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Funds like the iShares Russell Top 200 Growth ETF (NYSEARCA:...</p>\n\n<a href=\"https://seekingalpha.com/article/4711526-iwy-etf-growth-stocks-less-crowded-now\">Source Link</a>\n\n</div>\n","source":"seekingalpha_fund","html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>IWY: Growth Not So Crowded Now</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\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\">\nIWY: Growth Not So Crowded Now\n</h2>\n\n<h4 class=\"meta\">\n\n\n2024-08-07 23:56 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4711526-iwy-etf-growth-stocks-less-crowded-now><strong>seekingalpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Richard Drury This week's drop has created buying opportunities, and growth stocks are one area I think could do quite well going forward. Funds like the iShares Russell Top 200 Growth ETF (NYSEARCA:...</p>\n\n<a href=\"https://seekingalpha.com/article/4711526-iwy-etf-growth-stocks-less-crowded-now\">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":"SPY.AU","symbol_name":"SPDR® S&P 500® ETF Trust","start_time":0,"source_url":"https://seekingalpha.com/article/4711526-iwy-etf-growth-stocks-less-crowded-now","article_id":"2457298598","we_media_id":null,"thumbnails":["https://static.seekingalpha.com/cdn/s3/uploads/getty_images/1455774438/image_1455774438.jpg"],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2457298598","pubTimestamp":1723046160,"sourceInfo":{"source_id":"seekingalpha_fund","name":"Seeking Alpha"},"weMediaInfo":null,"summary":"Richard Drury This week's drop has created buying opportunities, and growth stocks are one area I think could do quite well going forward. Funds like the iShares Russell Top 200 Growth ETF (NYSEARCA:I","collect":0,"end_time":0,"defaultTopTitle":"seekingalpha.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"SPY.AU":"SPDR® S&P 500® ETF Trust","SSO":"两倍做多标普500ETF","BK4559":"巴菲特持仓","OEF":"标普100指数ETF-iShares","BK4588":"碎股","BK4550":"红杉资本持仓","IWY":"iShares Russell Top 200 Growth I","SPXU":"三倍做空标普500ETF","SH":"标普500反向ETF","OEX":"标普100","BK4561":"索罗斯持仓",".SPX":"S&P 500 Index","BK4581":"高盛持仓","BK4504":"桥水持仓","SPY":"标普500ETF","IVV":"标普500指数ETF","SDS":"两倍做空标普500ETF","SCHG":"Schwab U.S. Large -Cap Growth ET","BK4593":"纳斯达克ETF","BK4585":"ETF&股票定投概念","BK4534":"瑞士信贷持仓"},"translate_title":"IWY：现在增长没那么拥挤","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"SPY":1,"SPY.AU":1,"SCHG":1,"IWY":1,"US30Y.BOND":0.78,"US10Y.BOND":0.78,"US12M.BOND":0.78,"US2Y.BOND":0.78,"US3Y.BOND":0.78,"US5Y.BOND":0.78,"US6M.BOND":0.78,"US7Y.BOND":0.78,"SH":0.6,"US912797GK78.BOND":0.6,"SSO":0.6,"US912797GL51.BOND":0.6,"US912797GW17.BOND":0.6,"US912797HE00.BOND":0.6,"SPXU":0.6,".SPX":0.6,"SDS":0.6,"OEX":0.6,"OEF":0.6,"IVV":0.6,"ESmain":0.6},"content_text":"Richard Drury This week's drop has created buying opportunities, and growth stocks are one area I think could do quite well going forward. Funds like the iShares Russell Top 200 Growth ETF (NYSEARCA:IWY) have shed over -16% from the 2024 high but were immediately bid at Monday's open. Investors were clearly prepared to buy the fear, and perhaps they were right to. This article explores why. IWY - One of the Better Growth Funds According to the fund page, IWY provides \"Exposure to large U.S. companies whose earnings are expected to grow at an above-average rate relative to the market.\" It is a passively managed fund which seeks to track the Russell Top 200 Growth Index which \"includes Russell Top 200® Index companies with relatively higher price-to-book ratios, higher I/B/E/S forecast medium term (two-year) growth and higher sales per share historical growth (five years).\" The selected 110 holdings create a portfolio with a much higher PE ratio, higher EPS growth and larger average market cap than the Russell Top 200 on its own. Index Stats (FTSE Russell) The performance is boosted as a result, at least under recent conditions. Performance (FTSE Russell) IYM has a very familiar top 10 holdings and the usual heavy exposure to the technology sector. Holdings (Seeking Alpha) Sixty-six percent concentration in the top 10 stocks is high, but it is a feature in most of the similar funds. There is not much to tell the mega cap growth ETFs apart. Peer Comparison (Seeking Alpha) IWY's one-year performance slightly lags the Schwab U.S. Large-Cap Growth ETF (SCHG). Its expense ratio is higher at 0.2% compared to 0.04% in SCHG. SCHG is also less concentrated in its top 10 holdings, which make up 58.17% of the fund. IWY is a very decent fund, but SCHG may well be the best in this space. Growth Still Attractive Large-cap growth stocks have been one of the best investments of recent times. IWY has outperformed the S&P 500 (SPY) and the Nasdaq (QQQ) over most timeframes, including the last year, and as shown below, the last three years. Data by YCharts Recent developments in the stock markets have raised the question of whether this trade is now over. Some of the heaviest falls have been in growth stocks and the \"Mag 7.\" However, I would argue the sharp drop was just a symptom of success. The huge rally naturally led to overvaluation and overexposure; there's no doubt growth was a crowded trade. Yet, overvaluation is not necessarily a catalyst for a top, and it can be reset with lower prices. The catalyst for the August correction has no real relation to growth stocks. The dollar/yen carry trade blowing up is not a long-term driver, although it may have necessitated forced selling of stocks in crowded trades like the Mag 7. Furthermore, the scare over the labor market may be an overreaction. If next month's Jobs Report shows improved readings, we may wonder what all the fuss was about. Yes, the July report was concerning, but if the unemployment rate were to fall back to 4.1%, it would reflect a slowing but solid economy. Due to the concerns over the economy, markets now expect a much more aggressive rate cutting cycle from the Fed. An oversized 50bps cut is already priced in for September, and the Fed is very likely to deliver it. Nearly five cuts are expected this year, when only a few weeks ago markets were undecided whether it would be two or three. I, personally, think this is yet another overreaction by markets, which have been swinging from overly dovish expectations to overly hawkish and back all year. In any case, the Fed is almost certain to deliver a flurry of cuts to try and save the soft landing. If they want to stimulate the economy, they may eventually take the Fed Fund Rate below the neutral rate, which is thought to be around 2.8%. This is good news for growth stocks, which are long duration assets. What I particularly like about IWY and similar funds is that they held trend support during this week's sell-off. This suggests my positive view is shared by whoever bought Monday's open, which tested the channel and the 200-day moving average. IWY Daily Chart (TradingView) Risks If prices were to break the support shown above and stay below Monday's $187.81 low, I might have to reconsider my investment. Buying dips in the trend has worked, but there will be one day when a much larger correction unfolds. Perhaps the US is really heading for a recession. Perhaps the carry trade has much more to unwind, and forced selling will take down the stocks held by IWY. If the 2022-2024 uptrend is over, a 50-61% retrace is common, and this would target $148-161. Conclusions The recent broad market sell off has particularly affected growth stocks, not because there is a particularly negative catalyst for growth stocks specifically, but because they were a crowded trade. The unwinding of the US dollar/yen carry trade likely caused forced selling because so many investors had oversized positions in mega cap growth stocks.  There are reasons to stay positive in this space, and the strong buying at trend support on Monday backs up this view. IYM is a good fund to gain exposure to as its performance is better than most other funds and is a close second to SCHG.","kind":null,"is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"1","news_tag":"","news_rank":0,"symbols":[],"gpt_button":0},"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":"4.28.3","shortVersion":"4.28.3","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/2457298598"}