Designed to provide broad exposure to the Style Box – All Cap Growth category of the market, the iShares Core S&P U.S. Growth ETF (IUSG) is a smart beta exchange traded fund launched on 07/24/2000.
What Are Smart Beta ETFs?
The ETF industry has traditionally been dominated by products based on market capitalization weighted indexes that are designed to represent the market or a particular segment of the market.
Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well for investors who believe in market efficiency.
There are some investors, though, who think it’s possible to beat the market with great stock selection; this group likely invests in another class of funds known as smart beta, which track non-cap weighted strategies.
Non-cap weighted indexes try to choose stocks that have a better chance of risk-return performance, which is based on specific fundamental characteristics, or a mix of other such characteristics.
Methodologies like equal-weighting, one of the simplest options out there, fundamental weighting, and volatility/momentum based weighting are all choices offered to investors in this space, but not all of them can deliver superior returns.
Fund Sponsor & Index
The fund is managed by Blackrock. IUSG has been able to amass assets over $11.70 billion, making it one of the largest ETFs in the Style Box – All Cap Growth. IUSG, before fees and expenses, seeks to match the performance of the S&P 900 Growth Index.
The S&P 900 Growth Index measures the performance of the large and mid-capitalization growth sector of the U.S. equity market.
Cost & Other Expenses
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive cousins if all other fundamentals are the same.
Operating expenses on an annual basis are 0.04% for IUSG, making it one of the least expensive products in the space.
It’s 12-month trailing dividend yield comes in at 0.74%.
Sector Exposure and Top Holdings
ETFs offer diversified exposure and thus minimize single stock risk, but it is still important to delve into a fund’s holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
Representing 42% of the portfolio, the fund has heaviest allocation to the Information Technology sector; Consumer Discretionary and Healthcare round out the top three.
When you look at individual holdings, Apple Inc (AAPL) accounts for about 13.25% of the fund’s total assets, followed by Microsoft Corp (MSFT) and Amazon Com Inc (AMZN).
The top 10 holdings account for about 50.19% of total assets under management.
Performance and Risk
The ETF has lost about -16.78% and is up roughly 0.08% so far this year and in the past one year (as of 04/29/2022), respectively. IUSG has traded between $91.91 and $117.16 during this last 52-week period.
The fund has a beta of 1.02 and standard deviation of 24.61% for the trailing three-year period, which makes IUSG a medium risk choice in this particular space. With about 477 holdings, it effectively diversifies company-specific risk.
Alternatives
IShares Core S&P U.S. Growth ETF is an excellent option for investors seeking to outperform the Style Box – All Cap Growth segment of the market. There are other ETFs in the space which investors could consider as well.
First Trust US Equity Opportunities ETF (FPX) tracks IPOX-100 U.S. Index and the iShares Morningstar Growth ETF (ILCG) tracks MORNINGSTAR US LARGE-MID CP BRD GRWTH ID. First Trust US Equity Opportunities ETF has $1.30 billion in assets, iShares Morningstar Growth ETF has $1.80 billion. FPX has an expense ratio of 0.57% and ILCG charges 0.04%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Style Box – All Cap Growth.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit
Zacks ETF Center
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