Typical benchmarks such as the iShares S&P 500 ETF ( IVV) contain a blend of both growth and value companies that are based on characteristics of the companies that comprise the index. A blended mix can create better overall diversification for most ETF investors, yet may not serve the needs of those that are looking to incorporate a specific style or avoid certain sectors.
To address this need, the iShares S&P 500 Growth ETF ( IVE) and iShares S&P 500 Value ETF ( IVW) contain large-cap companies within the bellwether index that have been designated with a growth or value style. Not surprisingly, the growth index is chocked full of technology, health care and consumer discretionary names. Conversely, the value ETF is loaded with financial, industrial, and energy companies.
The distinction between the two styles may seem cut-and-dried at first glance. However, a closer inspection reveals well over 300 stocks in each ETF. The math just doesn’t add up to the 500 stock tally that you would expect.
The reason for this is that some stocks contain growth AND value qualities, which means they are represented in both funds. This leads to overlap in specific areas that may not be ideal for style purists or those looking to exploit a more concentrated group of stocks.
To address this disconnect, Guggenheim offers a suite of six “pure style” ETFs designed to maximize your exposure to specific styles and market capitalizations. These funds include:
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
