iShares Russell Top 200 Growth ETF (IWY) - One of best passive index ETF for large cap growth

iShares Russell Top Growth ETF (IWY) is one of the best passive index ETFs for large cap growth asset class. It's quite inexpensive with expense ratio of just 0.20%. It has outperformed it's category by almost 25% for last 3,5,10 years period:

Source: Morningstar Performance tab

It's holdings are 12% cheaper (PE of 30 vs 34) than broad large cap growth index. It's projected long term earnings growth of 17% is quite comparable to that of it's index. 

It's standard deviation of 18% is same as that of Total Stock index, even though it has outperformed Vanguard Total Stock index by 50% in last 3,5 years period.

Note that, as long term investor, my advice is to mostly stick with style-neutral broad market index. Styles come and go and those chasing today's hot style are mostly too late in the style game and eventually tend to lag. 

As such, we can go for Large Growth factor bias for small portion of portfolio. My suggestion would be to go slow as this style has become irrationally expensive due to investor's chasing of this style lately. One possible approach to slowly get into this style would be to buy IWY as we happen to buy stock funds during asset rebalancing (eg during stock market pullback/correction/crash when we typically sell bonds and then buy stocks).

How does it compare with other technology heavy large growth ETF such as Invesco QQQ Trust (QQQ)?

IWY is more diversified with 200 top growth companies as compared to just 100 NASDAQ growth companies in QQQ . Also, unlike QQQ, it's not biased to specific exchange, such as NASDAQ, for it's underlying holdings. It's technology concentration of 43% is very close to that of QQQ's 48%. Even though it's past performance has lagged QQQ by paltry 1%, it's future earnings growth projection is 1% better than QQQ. All things considered, IWY seems better option when it comes to investing in technology heavy large cap growth.

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