Greetings!
Below please find the ETF Spotlight newsletter containing highlights of the research and data on www.etfresearchcenter.com as well as a recap of the past week's action in the ETF market.
Spotlight will be taking the following two weeks off so we'd like to take this opportunity to wish our readers a joyous holiday season. We'll be back in the New Year. |
In this week's issue
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- Chart of the week: Growth's Slowing Growth
- Fund Focus: iShares S&P500 Growth (IVW)... page 2
- Revisions, assets flows & short interest...page 3
- 2012 Sales per share estimates, annual change, and P/S multiples of major ETFs...page 4
- Market monitor: big movers & market segments...page 5
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Chart of the week
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Growth's Slowing Growth
Earnings growth of stocks in the iShares S&P500 Growth fund (IVW) are forecast to slow considerably next year, to about 10% versus 23% this year. Comparisons are simply getting very tough, especially for Tech stocks which are just over one-quarter of assets. Meanwhile EPS growth for their counterparts in the Value fund (IVE) should remain steady, also at about 10% next year. Nonetheless, Growth stocks trade at a valuation premium, including a price-to-book value multiple of 3.0x, versus 1.8x for the broader S&P 500 and 1.3x for Value stocks.
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Figure: 2011-12 Estimated EPS Growth
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Fund in Focus
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 iShares S&P500 Growth (IVW)
Although their counterparts in the Value fund (IVE) enjoy a higher ALTAR Score--indicating better potential in the long run--stocks in the Growth index may be better suited to weather another economic slowdown given the sector tilt towards Tech, Health Care and Staples, and away from Financials. As a result, margins and ROE are both higher and more persistent, although this comes with a lofty P/BV multiple.
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