U.S. Large-Cap Growth ETF Rankings to Boost ETF Portfolios

by: MyPlanIQ

ETFs are becoming ubiquitous as their appeal drives them to increasing use in building portfolios. In a previous article we started to review the relative performance of ETFs that are in the same sub-class.

So far, we have looked at large cap blend ETFs and we derived the following ranking.

Ticker
2005
2006
2007
2008
2009
2010
6.543
14.846
0.908
-40.055
44.072
20.504
4.473
14.824
4.559
-37.737
28.527
16.778
4.828
15.203
5.146
-36.795
26.352
14.584
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In this article, we move on to cover Large Cap Growth ETFs with the goal of providing the same ranking.

We will follow the same process -- rank and determine a cutoff based on trading volume for liquidity and low trading friction, then rank them based on their returns and assign a score.

We start with a broad list of Large Cap Growth ETFs:

Symbol

Name

QQQQ

PowerShares QQQ

IWF

iShares Russell 1000 Growth In

IVW

iShares S&P 500 Growth Index

VUG

Vanguard Growth ETF

SCHG

Schwab U.S. Large-Cap Growth E

RPG

Rydex S&P 500 Pure Growth

PWB

PowerShares Dynamic Large Cap

MGK

Vanguard Mega Cap 300 Gr Index

IWY

iShares Russell Top 200 Growth

FTC

First Trust Large Cap Gr Opp A

QQEW

First Trust NASDAQ-100 Equal W

JKE

iShares Morningstar Large Grow

VOOG

Vanguard S&P 500 Growth Index

QQXT

First Trust NASDAQ-100 ex-Tech

VONG

Vanguard Russell 1000 Growth I

PQY

PowerShares Active AlphaQ

SPYG

SPDR S&P 500 Growth ETF

ROI

WisdomTree LargeCap Growth

RWG

RP Focused Large Cap Growth ET

RPX

RP Growth ETF

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We reviewed daily trading volume data and applied a cutoff below 300,000. This left us with a choice of four ETFs with sufficient volume to be considered further.

The four funds with sufficient volume were examined for their returns performance and given an overall score.

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Ticker

Description

5 Yr AR%

3yr AR%

1yr AR%

QQQQ

PowerShares QQQ

6.41%

8.05%

31.84%

VUG

Vanguard Growth ETF

2.91%

2.65%

17.62%

[[IWF]]

iShares Russell 1000 Growth Index

2.65%

2.21%

17.76%

IVW

iShares S&P 500 Growth Index

2.16%

2.01%

16.19%

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QQQQ clearly comes out on top. Although VUG scored slightly higher than IWF, we have selected IWF as it's trade volume is nearly double increasing liquidity.

We now dig into the top two a little more.

QQQQ
2005
2006
2007
2008
2009
2010
Draw Down(%)
13.076
17.267
11.448
49.99
18.286
15.769
Return(%)
1.565
7.144
19.028
-41.727
54.702
20.533
IWF
Draw Down(%)
7.772
9.67
8.849
48.536
21.59
15.41
Return(%)
3.784
7.881
10.449
-39.026
34.512
15.452
Click to enlarge

We observe that QQQQ has more volatility suggested by the higher drawdown ration. QQQQ has given good returns over the last five years. The returns haven't been so good over a ten year period and the volatility is relatively high. IWF has given lower returns at a lower risk and so is a good complement to QQQQ.

So we have now completed the large cap blend and large cap growth ETFs and we can summarize their performance in a graph.

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We continue to build a list of top performing ETFs that will allow us to create a plan of funds that will build a strong portfolio.

In future articles we will review large cap value ETFs and then start applying the funds to an investment plan.

Disclosure: MyPlanIQ does not have any business relationship with the company or companies who provide the ETFs mentioned in this article. The performance data of portfolios mentioned above are obtained through historical simulation and are hypothetical.