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We are working our way through the US Equity ETFs, ranking each sub-class to derive a set of top performing ETFs that we will then use to build a plan of ETFs and measure the performance.

We have completed Large, Mid Cap and Small Cap Blend ETFs and this article covers Small Cap Growth. We rank and determine a cutoff based on trading volume for liquidity and lowtrading friction, then rank them based on their returns and assign a score.

We start with a full list of small cap blend ETFs:




iShares Russell 2000 Growth In


Vanguard Small Cap Growth ETF


iShares S&P SmallCap 600 Growt


SPDR S&P 600 Small Cap Growth


iShares Morningstar Small Grow


PowerShares Dynamic Small Cap


Rydex S&P SmallCap 600 Pure Gr


Vanguard S&P Small-Cap 600 Gr


Vanguard Russell 2000 Growth I

We now apply trading volume data for us to be able to reduce the number of ETFs that we examine. As with the other ETFs, we apply a minimum trading volume to maximize liquidity and minimize trading friction. In this case, there is a cliff around 200,000 and above, and then it drops down to around 20,000.

We are then left with three alternatives:

5 Yr AR%
3yr AR%
1yr AR%
Vanguard Small Cap Growth ETF
iShares Russell 2000 Growth
iShares S&P SmallCap 600 Growth

click to enlarge

We selected VBK and IWO, although IJT comes close.

We can review the performance of blend and growth ETFs to see their relative merits.

We have one more sub-class to analyze and then we will be able to create a set of ETFs for the US equity sub class.

Source: U.S. Small Cap Growth ETF Rankings