While Vanguard’s VOO has attracted significant attention lately, with its assets under management (AUM) surpassing $1 trillion, a small-cap underdog, IWO, is quietly firing on all cylinders in terms of performance.
VOO stock price jumped by 11% this year and attracted over $124 billion in assets under management (AUM). In contrast, the iShares Russell 2000 Growth ETF (IWO) has shed $740 million in assets, even as its total return rose by 20%.
IWO is a fund that focuses on small-cap names, some of which have done well this year. It has over $14 billion in assets and holds 1,084 companies. Most of these companies are in the industrial, information technology, and healthcare industries. The three groups account for 68% of the fund. The other top sectors are in the financials, consumer discretionary, and materials.
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Some of the biggest companies in the fund are Bloom Energy, Credo Technology, Sterling Infrastructure, IONQ, Fabrinet, and Sitime Corp. These are some of the best-performing companies on Wall Street this year.
Bloom Energy stock has jumped by 1,200% over the last 12 months, helped by its deals in the AI industry, including with companies such as Oracle, CoreWeave, Intel, and Equinix. Its energy solution has been highly useful in the data center industry.
Credo Technology Group stock has also soared by 212% in the last 12 months and by 75% this year. This growth happened as demand for its high-speed connectivity solutions jumped. IONQ, on the other hand, has soared due to ongoing demand for quantum computing companies.
IWO stock is beating the VOO ETF this year because it combines value and growth. As mentioned above, the two largest sectors in the fund are industrial and technology, followed by healthcare. The tech industry is known for its growth, while the other two are known for their value.
The IWO ETF may continue its rally, as it is not overly overvalued. It has a forward price-to-earnings (PE) ratio of 26, slightly above the S&P 500 Index’s 23.
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