5 Small Cap Growth ETFs

In this article, we discuss the 5 small cap growth ETFs. If you want to read about some more growth ETFs, go directly to 10 Small Cap Growth ETFs.

5. iShares Russell 2000 Growth ETF (NYSE:IWO)

YTD Return as of September 14: 9.5%

5-Year Return as of September 14: 6.5%

iShares Russell 2000 Growth ETF (NYSE:IWO) is a fund that tracks the performance of the Russell 2000 Growth Index. The fund invests in companies that have economic characteristics that are substantially identical to the component securities of the underlying index.  

One of the biggest holdings of iShares Russell 2000 Growth ETF (NYSE:IWO) is ChampionX Corporation (NASDAQ:CHX), a company that provides chemistry solutions, and engineered equipment and technologies to oil and gas companies. At the end of the second quarter of 2023, 24 hedge funds in the database of Insider Monkey held stakes worth $272 million in ChampionX Corporation (NASDAQ:CHX), compared to 25 in the preceding quarter worth $336 million. 

In its Q4 2022 investor letter, Alger Capital, an asset management firm, highlighted a few stocks and ChampionX Corporation (NASDAQ:CHX) was one of them. Here is what the fund said:

“ChampionX Corporation (NASDAQ:CHX) provides equipment and services that assist in the drilling. completion and production phases of well drilling. The company also provides production and reservoir chemicals, along with highly engineered equipment and technologies, such as artificial lift and drill bit inserts, for the oil and gas industry. Notably, ChampionX has a global footprint and favorable product mix, where its chemicals and artificial lift businesses are tied to the production phase of the life of a well. We believe this produces lower earnings variability and potentially stronger operating results. Shares outperformed during the quarter as the company reported strong fiscal third quarter results and gave better-than-expected fourth quarter guidance. Moreover, the company expanded its capital return program by committing to return 60% of its free cash flow (FCF) to shareholders through opportunistic buybacks. Management also raised its share buyback authorization program from $250m to $750m over next 2 to 3 years. We believe the company is well positioned to deliver strong revenue growth, driven by their production focused Performance Chemicals business, which may lead to margin improvement and FCF generation.”