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
Comments
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 Most Expensive iPhone Apps

The 9 Most Expensive Designer Shoes in the World

The 10 Most Expensive Cigarette Brands

The 10 Most Expensive Law Schools in the US

The 10 Best Wall Street Movies

The 10 Most Expensive Golf Clubs Ever Sold

The 10 Most Expensive Golf Memberships

The 10 Best Disney Characters Ever Created

The 8 Best Foods for Gaining Weight

The 10 Most Expensive Colleges in the World

The 7 Most Memorable Ad Campaigns of All Time

The 7 Most Expensive High Schools in the World

The 10 Electric Vehicles with the Longest Range

The 10 Cities with the Worst Drivers in the World

The 10 Most Expensive Dresses Ever Created

10 Islands to Visit Before You Die

10 Famous Celebrities Who Needed Rehab

The 15 Countries with the Largest Oil Reserves

The 10 Most Overused Excuses in the World

The 5 Best iOS Apps You Can’t Get on Android

5 Companies Damaged By Social Media Blunders

The 10 Most Legendary Blues Songs

The 10 Most Lawless Places in the World

4 Reasons China is a Threat to the US

The 17 Most Sugary Drinks in the World

The 10 Most Ruthless Rulers in History

The 10 Greatest Generals in History

Top 8 Travel Destinations for 2015

The 10 Safest Dog Breeds for Children

The 10 Most Stolen Vehicles in the US

The 7 Most Expensive Celebrity Weddings

The 10 Best LoL Teams in the World

Top 10 Worst Marketing Campaigns Ever Produced

Top 5 Diets that Help You Lose Weight

The 10 Best Ways to Stay Awake

7 Artists That Switched Musical Genres

The 10 Most Expensive Cities to Live in New Jersey

The 10 Best High Schools in New York

The 10 Countries With the Least Gender Inequality

The 6 Biggest Musician-Manager Feuds

The 10 Countries with the Cheapest Gas Prices

The 7 Most Theatrical Bands of All Time

The 8 Worst Band Breakups of All Time

The 10 Most Important South American Leaders

The 7 Most Successful Casting Show Winners

The 10 Most Peaceful Countries in the World

5 Big Reasons Communism Failed

The 15 Most Famous Carl Icahn Quotes

10 Scary Animals that are Actually Harmless

The 8 Most Famous Singer-Actors in Entertainment

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!