A Growth ETF For 2013

Page 1 of 2

A Growth ETF For 2013With just a few trading days left in 2012, it is fair to say, broadly speaking, that the soon-to-be completed year was kind to growth stocks. Even with a recent downturn, Apple Inc. (NASDAQ:AAPL) is up 28.4 percent for the year. Amazon.com, Inc. (NASDAQ:AMZN) is sitting on a gain of 49.4 percent and the list goes on from there.

However, as S&P Capital IQ notes, value stocks in the S&P 500 have outperformed the index’s growth constituents this year. The good news is that improvements in the U.S. and global economies, a recovery in S&P 500 earnings along with modest valuations mean 2013 could work out to be a good year for growth stocks.

One ETF with which to play a resurgence in large-cap growth names is the iShares S&P 500 Growth Index (NYSEARCA:IVW), which has over $6.6 billion in assets under management. The fund received an Overweight rating from S&P Capital IQ in a recent research note by the firm.

“Generally, growth stocks trade at a higher price to earnings (P/E) multiple to the broader market, but have appeal for their stronger earnings prospects,” said S&P Capital IQ in the note. “This is currently the case as, according to S&P/Dow Jones Indices data as of December 14, the S&P 500 Growth Index trades at a premium 2013 P/E multiple of 13.6X Capital IQ consensus estimated EPS for 2013, vs. the 12.5X of the broader S&P 500 Index, but had a P/E-to-growth ratio of 1.1X, vs. 1.2X.”

iShares S&P 500 Growth Index (NYSEARCA:IVW), which charges annual fees of 0.18 percent, is similar to many large-cap growth ETFs in that it is debatable as to how many of the fund’s holdings can legitimately wear the growth label. Apple and Google combine for about 10 percent of the ETF’s weight, but other top-10 holdings includes stocks that can be accurately described as value names including Exxon Mobil Corporation (NYSE:XOM), Johnson & Johnson (NYSE:JNJ) and The Procter & Gamble Company (NYSE:PG). S&P Capital IQ notes that it has Strong Buy or Buy ratings on eight of the ETF’s top-10 holdings.

Page 1 of 2
blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months. Our beta is only 1.2 (don't click this link if beating the market isn't important to you).

Lists

The 10 Best Countries To Work In the World

A Profitable Day At The Track: 5 Tips For Betting On Horses

Tearing You Apart: 6 Bad Habits That Ruin Relationships

Learning on the Job: The 6 Biggest Mistakes Parents Make

Shopaholics Rejoice: The 12 Biggest Malls in the World

Fright Night: 10 Horror Movies Based on True Stories

Mach Mania: The 10 Fastest Jets in the World

Military Heavyweights: The 10 Countries with the Most Tanks

All In: The 7 Richest Poker Players in the World

Abracadabra: The 10 Best Magicians in the World

The 10 Richest Asian Countries in the World in 2014

Eyes in the Sky: 10 Things You Need to Know About Drones

Rising Stars: The 6 Best Silicon Valley Startups

Military Muscle: The 5 Most Advanced Armies in South America

All that Glitters: The 7 Most Luxurious Jewelry Brands in the World

5 Things You Didn’t Know About ISIS but Should

Empowering Your Money: The 5 Best Energy Stocks to Invest In

The 11 Best Android Apps You Can’t Get on iOS

The 10 Most Important International Conflicts in 2014

Mood Enhancers: The 20 Most Uplifting Songs of all Time

Lover Beware: The 8 Countries that Cheat the Most

Breath of Fresh Air: The 25 Countries with the Best Air Quality on the Planet

Singles Beware: The 8 Worst Mistakes Made on First Dates

Healthy and Happy: The 10 Countries with Lowest Healthcare Costs

The 6 Best Company Team Building Activities to Build Workplace Camaraderie

Ships Ahoy: The 10 Busiest Shipping Ports in the World

10 Productivity Tips to Save You Time and Help You Do More With Less

Grab a Bite: The Most Popular Fast Food Restaurants in America

Friday Night Thirst: The 10 Most Popular Cocktails in the World

The 6 Greatest Unsolved Mysteries We May Never Figure Out

7 Useless Products You Never Should’ve Bought

The 5 Reasons Why You’re Single and Miserable

The 7 Most Addictive Foods in the World We Can’t Stop Eating (Even Though We Should)

5 Amazing Places You Can Swim with Dolphins

The Top 7 Most Livable Countries In The World

The 10 Most Expensive Baseball Cards Ever Pulled From A Pack

The 5 Easiest Second Languages to Learn for English Speakers

Silver Spoon: The 6 Richest Families in the World

The 20 Countries with the Largest Prison Populations in the World

The Top 10 Richest Actors in the World

The 10 Best Airline Stocks to Invest In Before They Fly Too High

Burger Kings: The 10 Most Expensive Burgers in the World

The 10 Most Ethnically Diverse Countries in the World

The 10 Most Exclusive Credit Cards in the World

The 10 Most Expensive Cruise Ships in the World

The 10 Fastest Supercomputers in the World

The 10 Best Countries for Doing Business 2015

6 Most Expensive Fruits In The World

10 Worst Airlines in the World

The 10 Biggest Tax Havens in the World to Stash Your Money

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!