Growth ETF

By: EconomyWatch   Date: 3 August 2009

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Growth stocks typically represent those companies that have prospects of double-digit earnings growth and may have ambitious goals for new products and new services. Growth ETFs are those exchange traded funds that invest in such stocks.  

Who Should Invest in Growth ETFs
 

Growth ETFs are usually opted for by investors who:

  • Are aiming to invest in large-cap growth stocks

  • Are seeking long-term growth of capital

  • Have a long-term investment horizon (at least five years)

  • Desire flexibility to trade anytime during a trading day

 

Growth ETFs  

Some of the popular growth ETFs are:

  • WisdomTree LargeCap Growth Fund: Trading under the ticker symbol ROI, this ETF ranks stocks based on a composite score derived from the following metrics, annual earnings per share growth, annual book value per share growth, annual sales per share growth and annual stock price growth.

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  • WisdomTree LargeCap Growth Fund competes with ETFs such as iShares Russell 1000 Growth and iShares S&P 500 Growth ETF. Unlike these ETFs, which apply their growth screens to existing index constituents, WisdomTree LargeCap Growth Fund filters all eligible companies through its screen and selects the top 30% of the highest scoring 1,000 companies.

  • iShares Russell 1000 Growth Fund: This fund trades under the ticker symbol IWF and seeks to generate investment returns that correspond to the price and yield performance of the Russell 1000 Growth Index. This index represents about 50% of the total market capitalization of the Russell 1000.

  • First Trust Multi Cap Growth AlphaDEX: The fund, which trades under the ticker symbol FAD, seeks investment results that correspond generally to the price and yield of the Defined Multi Cap Growth Index. This index ranks and selects the top 75% of all the stocks in the S&P Composite 1500/Citigroup Growth Index on the basis of fundamental parameters.

Vanguard Growth ETF: Trading under the ticker symbol VUG, this ETF seeks to track the performance of an index that measures the investment return of large-cap growth stocks.

 


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Most Popular in Exchange Traded Funds

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