|Bid||159.68 x 1000|
|Ask||207.76 x 1000|
|Day's Range||205.62 - 209.14|
|52 Week Range||129.54 - 226.23|
|PE Ratio (TTM)||N/A|
|YTD Daily Total Return||-2.54%|
|Beta (5Y Monthly)||1.27|
|Expense Ratio (net)||0.24%|
This article is a part of InvestorPlace.com's Best ETFs for 2020 contest. Ian Bezek's choice for the contest is the iShares Russell 2000 Growth ETF (NYSEARCA:IWO).My pick for the best exchange-traded-fund of 2020, the iShares Russell 2000 Growth ETF (NYSEARCA:IWO), got off to a horrible start. IWO plunged more than 30% during the March crash. However, it has an excellent comeback story going now that should keep it among the best ETFs to consider this year.InvestorPlace - Stock Market News, Stock Advice & Trading TipsSpecifically, IWO recovered nearly all its losses this quarter as the economy has started to recover. What happened to cause this elevated volatility?Traders hit small-capitalization growth stocks particularly hard in March for understandable reasons. Small companies tend to be less resilient during hardship, all else equal. And small growth companies could face out-sized risk trying to navigate a prolonged economic downturn.However, with the economy and market putting up some better numbers as of late, small-cap growth has returned to favor. IWO has delivered a jaw-dropping 33% return over the past quarter. Small-cap growth stocks are a high-powered bet on American economic growth. That's looking like an increasingly compelling idea now as traders continue to focus on nimble fast-growing technology firms. IWO: Concentrated In Favorable SectorsThe IWO ETF is focused primarily on two sectors: healthcare and technology. In fact, as of this writing, IWO holds 52% of its assets in just those two sectors, with 34% of its funds invested in healthcare and 18% in technology. Traditionally, both of those sectors tend to be full of dynamic market-beating companies. On the other end of the spectrum, IWO has minimal exposure to telecoms, energy, basic materials and utilities. In doing so, it avoids many of the stodgier areas of the market, and could end up being one of the best ETFs in a post-Covid-19 world. * 10 Consumer Stocks to Buy to Ride the Post-Covid-19 Wave Additionally, you'll find IWO's top holding right at the intersection of healthcare and technology. As of this writing, IWO's top position is telehealth services company Teladoc (NYSE:TDOC). TDOC stock has been one of the year's top stars as it has enjoyed a surge of business due to the pandemic. While IWO doesn't take large individual positions -- it has hundreds of positions as it is a broad index fund -- the big winners like Teladoc naturally rise to be larger positions thanks to price appreciation.Taking a larger view, IWO is a great vehicle to get access to many of America's leading new growth companies. It's hard to keep up with all the new Teladoc-style rapid growth companies that emerge every single year. With IWO, you'll get a little exposure to the cream of the crop. Favorable Tradewinds Set to ReturnIt seems like a lifetime ago, but back before the novel coronavirus hit, one of the primary reasons to favor small-cap stocks was their protection from international trade disputes.In fact, last summer, small-cap companies were surging as the trade war with China heated up. Mayflower Advisors' fund manager Larry Glazer summed it up last July: "Investors are fearful, and they've been positioning for the smallest stocks they can get their hands on, and the most domestic stocks they can get their hands on in hopes of escaping this trade war."However, the tables turned by the end of 2019. The Trump Administration announced a Phase 1 trade deal with China. This caused large-cap tech and retail companies that rely on Chinese supply chains to rejoice. It appeared that global logistics concerns had ended. Small-cap funds such as IWO dipped as investors rotated into companies with major multinational footprints.Fast forward to today, however, and China is back under scrutiny. Many politicians and health experts have criticized China's handling of the coronavirus. The U.S. and some of its key allies are waging a public relations battle against Huawei and China-backed 5G networks. And now the Trump Administration is stepping up pressure on Chinese trade, with some administration officials speaking of a potential breakdown in the trade deal. This should, in turn, drive a sector rotation back into domestic small-cap companies like we saw last summer. Is IWO Still One of the Best ETFs?At this point, IWO's 2020 outlook rests primarily on whether a potential second-wave of the coronavirus ends up shutting down the economy again. A renewed economic stall would hit small-cap growth stocks hard.However, if we're able to keep the economy heading toward recovery, IWO should be set to continue its run-up. As IWO has proved with its 33% run over the past three months, it holds a collection of high-powered growth companies that can surge with any broader economic recovery. Additionally, the potential for renewed U.S.-Chinese trade concerns adds an additional catalyst for IWO. Any sort of "buy American" sentiment resulting out of the coronavirus would also be a massive win for the IWO's constituent companies, and place it among the best ETFs to buy in 2020.Ian Bezek has written more than 1,000 articles for InvestorPlace.com and Seeking Alpha. He also worked as a Junior Analyst for Kerrisdale Capital, a $300 million New York City-based hedge fund. You can reach him on Twitter at @irbezek. At the time of this writing, he held no positions in any of the aforementioned securities. More From InvestorPlace * Why Everyone Is Investing in 5G All WRONG * America's 1 Stock Picker Reveals His Next 1,000% Winner * Revolutionary Tech Behind 5G Rollout Is Being Pioneered By This 1 Company * Radical New Battery Could Dismantle Oil Markets The post Best ETFs for 2020: TheÂ iShares Russell 2000 Growth ETF Storms Back appeared first on InvestorPlace.
Wall Street is once again scaling new highs buoyed by positive news from China and the United States. Amid such scenario, growth investing seems the most compelling strategy.
Small-cap ETFs have been beating the S&P 500 this year, thanks to a more compelling valuation, decent U.s. economic growth momentum, a dovish Fed and easing trade tensions.
January is truly the time to get in on small-cap securities with the above-mentioned ETFs and stocks, assuming that the historical trend holds true in 2020.
This article is a part of InvestorPlace.com's Best ETFs for 2020 contest. Ian Bezek's pick for the contest is the iShares Russell 2000 Growth ETF (NYSEARCA:IWO).Source: Shutterstock Are you ready to party like it's 1999? You should be. The great big bull market of the 2010's is certainly getting up there in age. The skeptics have been calling for its demise for years now. But there's good news: We should have at least one more spectacular year ahead of us before the cycle turns.Why's that? Simply put, generational bull markets tend to end on euphoria. In 1929, for example, stocks became so popular that shoeshine boys were speculating in the market. In fact, so many ordinary Americans had gotten into trading that margin rates to borrow money to buy stocks hit 15% and up annually. There was literally a shortage of available credit because so many Americans borrowed to ride the bull.InvestorPlace - Stock Market News, Stock Advice & Trading TipsIn the 1960s, peace and love were in. So was money. Popular magazines were full of stock-picking tips. Young mutual fund managers became rock stars. People believed that the stock market was easy money. Incredibly, the stock market went up from the late 1940s with virtually no interruption until 1973, when the market finally imploded. Consider how that bull market ran for more than two decades before meeting its end.Similarly, the late 1990's mania was just the finishing touches on an amazing 18-year run in which the Dow Jones Industrial Average went from 1,000 to 10,000. Again, for comparison's sake, the S&P 500 would have to go from 666 (the March 2009 low) to nearly 7,000 to make a move of equal magnitude. Suddenly, calls for the S&P 500 to reach 4,000 don't look so silly. The Market Hasn't Topped Yet … 2019 Looks Like 1998The fact is, bull markets end with euphoria. People quitting their careers to take up day trading, as we saw in the late 1990s. That simply hasn't happened yet this time around. Instead, we actually saw a rather sedated market in 2019 where investors dumped shares of the market's most questionable offerings; stocks like Uber (NASDAQ:UBER), Lyft (NASDAQ:LYFT) and Slack (NYSE:WORK) were big busts. WeWork fared even worse. Its initial public offering (IPO) was canceled and the business is seemingly imploding now. * 10 Best-Performing Growth Stocks of the 2010s If you are looking for a comparable point, 1998 might be it. In the fall of that year, the IPO market came to a screeching halt following a sudden market correction. Stocks had dumped due to emerging market problems, which in turn, forced the Federal Reserve to cut rates and pump money into the system. Anything sound familiar? That's right, it's like the Fed cutting rates now to ease the pain of the escalating China trade war.Despite the emerging market problems, the stock market managed to close 1998 with gains in the 20-30% range on the major indexes. That was just setting the stage, however, for the fun that lay ahead. Stocks went absolutely bonkers to the upside in 1999 as the Fed's easy money flood set the stage for limitless upside on internet and other high-growth stocks. By the end of 1999, the tech-heavy Nasdaq Composite was up more than 80% in a single year. The Conditions Are In Place for a Big Run HigherMany bears have been quick to go after the stock market lately. They say trees don't grow to the sky. What goes up must come down. And so on. And they'll eventually be right. But there's no sign that the market needs to top tomorrow.Consider forward earnings. The S&P 500 is selling for less than 18x 2020's projected earnings. That's hardly more expensive than it has been over the past few years; the market was around 17.5x forward earnings when President Trump was inaugurated in January 2017, for example. That means that nearly all the gains in the stock market over the past three years have come due to earnings growth, not rising market valuations.With the Fed now cutting rates again, conditions are in place for a rise in earnings growth next year. The economy remains robust. Just look at consumer confidence or unemployment. Any sign of a trade deal, and things should surge. Don't forget that there's an election in November, and the incumbent has every incentive to try to juice the economy and stock market ahead of the vote. So don't be surprised if there is fiscal stimulus as well; who knows, maybe that rumored huge infrastructure deal will finally come to fruition.In any case, the S&P 500 topped at around 24x forward earnings in 2000. To hit a similar valuation level today, the S&P would have to surge to more than 4,200, or more than 25% upside from today's prices. That's even if earnings don't pick up next year. There's no guarantee we'll get to a 2000-level peak of enthusiasm before the market tops, but if the 1920s, 1960s and 1990s are any guide, things will end with more excitement than we have right now. The Best Way to Play This? Small-Cap GrowthIf you're full-on bullish on the market, your first instinct might be to purchase mega-cap growth stocks. They've led the stock market up so far, so why do something else? The thing is though, the so-called FAANG stocks can't keep leading the market forever. For example, Apple (NASDAQ:AAPL) is up 70% year-to-date and is already worth more than a trillion dollars. It won't realistically go up 70% again next year. Meanwhile, other popular tech stocks like Amazon (NASDAQ:AMZN) and Facebook (NASDAQ:FB) have started to underperform.That makes sense. Over time, leadership should transition to smaller-cap growth stocks as is often the case in late-cycle bull markets. Thus, my pick for InvestorPlace.com's best ETFs for 2020 is the iShares Russell 2000 Growth ETF (NYSEARCA:IWO). The smaller companies that make up the IWO ETF have far more room for upside as their market caps are typically just a few billion dollars or less. It's much easier to go from $2 billion to $10 billion in a couple of years than from $200 billion to a trillion. * 7 Best Quantum Computing Stocks Trading Today On top of that, this ETF is focused on companies with strong tailwinds at their backs. For example, nearly 30% of the ETF is invested in healthcare companies, which allows it to profit from the revolution in biotech, the huge growth in medical devices and the general demographic aging trend that is giving the whole sector a lift. After that, the ETF has 19% of its capital in industrials, which should do well with the Fed easing again and the economic cycle turning back up. And 17% of the fund is in technology stocks; thus, well over half of IWO is allocated to promising small companies that can get bigger quickly. IWO: Many Great FeaturesAnother reason to like IWO is that it is a large and cost-efficient ETF. Its expense ratio of just 0.24% per year, which makes it highly competitive with other growth funds. It has nearly $10 billion of assets under management, so it has no problems with liquidity or trading slippage. And it is highly diversified; no position makes up more than 1% of the ETFs total assets. So if some software company implodes or a biotech firm's lead drug candidate fails a key trial, it won't matter much to IWO overall.Investors still don't fully believe in this bull market. The IWO ETF is trading almost 5% below its September 2018 peak. Even while the market has easily surpassed last year's highs, pure growth names have lagged to a degree. That sets up a compelling opportunity for 2020, as small growth companies will shine brightly.At the time of this writing, Ian Bezek owned FB stock. You can reach him on Twitter at @irbezek. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * The 10 Best-Performing Growth Stocks of the 2010s * 10 Stocks With Little or No Debt to Own for the Next 50 Years * 5 Restaurant Stocks Dominating Holiday Season Foot Traffic The post Best ETFs for 2020: iShares Russell 2000 Growth ETF (IWO) Is the Best Bet appeared first on InvestorPlace.