Is iShares Core S&P U.S. Growth ETF (IUSG) a Strong ETF Right Now?

A smart beta exchange traded fund, the iShares Core S&P U.S. Growth ETF (IUSG) debuted on 07/24/2000, and offers broad exposure to the Style Box - All Cap Growth category of the market.

What Are Smart Beta ETFs?

Products that are based on market cap weighted indexes, which are strategies designed to reflect a specific market segment or the market as a whole, have traditionally dominated the ETF industry.

Market cap weighted indexes work great for investors who believe in market efficiency. They provide a low-cost, convenient and transparent way of replicating market returns.

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.

These indexes attempt to select stocks that have better chances of risk-return performance, based on certain fundamental characteristics or a combination of 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 sponsored by Blackrock. It has amassed assets over $20.07 billion, making it the largest ETF in the Style Box - All Cap Growth. IUSG seeks to match the performance of the S&P 900 Growth Index before fees and expenses.

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

Expense ratios are an important factor in the return of an ETF and in the long-term, cheaper funds can significantly outperform their more expensive cousins, other things remaining 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 has a 12-month trailing dividend yield of 0.64%.

Sector Exposure and Top Holdings

Most ETFs are very transparent products, and disclose their holdings on a daily basis. ETFs also offer diversified exposure, which minimizes single stock risk, though it's still important for investors to research a fund's holdings.

IUSG's heaviest allocation is in the Information Technology sector, which is about 36.10% of the portfolio. Its Telecom and Financials round out the top three.

Taking into account individual holdings, Nvidia Corp (NVDA) accounts for about 10.57% of the fund's total assets, followed by Apple Inc (AAPL) and Microsoft Corp (MSFT).

The top 10 holdings account for about 46.77% of total assets under management.

Performance and Risk

Year-to-date, the iShares Core S&P U.S. Growth ETF has lost about -6.82% so far, and it's up approximately 15.99% over the last 12 months (as of 05/01/2025). IUSG has traded between $113.47 and $146.45 in this past 52-week period.

IUSG has a beta of 1.12 and standard deviation of 22.05% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 456 holdings, it effectively diversifies company-specific risk.

Alternatives

IShares Core S&P U.S. Growth ETF is a reasonable option for investors seeking to outperform the Style Box - All Cap Growth segment of the market. However, there are other ETFs in the space which investors could consider.

IShares Morningstar Growth ETF (ILCG) tracks MORNINGSTAR US LARGE-MID CP BRD GRWTH ID and the Fidelity Blue Chip Growth ETF (FBCG) tracks ----------------------------------------. IShares Morningstar Growth ETF has $2.28 billion in assets, Fidelity Blue Chip Growth ETF has $3.60 billion. ILCG has an expense ratio of 0.04% and FBCG charges 0.59%.

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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This article originally published on Zacks Investment Research (zacks.com).

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