Large Cap Growth Style 3Q18: Best and Worst

David Trainer  |


The Large Cap Growth style ranks fifth out of the twelve fund styles as detailed in our 3Q18 Style Ratings for ETFs and Mutual Funds report. Last quarter, the Large Cap Growth style ranked fifth as well. It gets our Neutral rating, which is based on an aggregation of ratings of 23 ETFs and 673 mutual funds in the Large Cap Growth styl. See a recap of our 2Q18 Style Ratings here.

Figures 1 and 2 show the five best and worst rated ETFs and mutual funds in the style. Not all Large Cap Growth style ETFs and mutual funds are created the same. The number of holdings varies widely (from 20 to 594). This variation creates drastically different investment implications and, therefore, ratings.

Investors seeking exposure to the Large Cap Growth style should buy one of the Attractive-or-better rated ETFs or mutual funds from Figures 1 and 2.

Our Robo-Analyst technology[1] empowers our unique ETF and mutual fund rating methodology, which leverages our rigorous analysis of each fund’s holdings.[2] We think advisors and investors focused on prudent investment decisions should include analysis of fund holdings in their research process for ETFs and mutual funds.

Figure 1: ETFs with the Best & Worst Ratings – Top 5

Click to enlarge

* Best ETFs exclude ETFs with TNAs less than $100 million for inadequate liquidity.

Sources: New Constructs, LLC and company filings

JPMorgan U.S. Quality Factor ETF (JQUA), VictoryShares Dividend Accelerator ETF (VSDA), and NuShares ESG Large Cap Growth ETF (NULG) are excluded from Figure 1 because their total net assets (TNA) are below $100 million and do not meet our liquidity minimums.

Figure 2: Mutual Funds with the Best & Worst Ratings – Top 5

Click to enlarge

* Best mutual funds exclude funds with TNAs less than $100 million for inadequate liquidity.

Sources: New Constructs, LLC and company filings

AB Flex Fee Large Cap Growth Portfolio (FFLYX) is excluded from Figure 2 because its total net assets (TNA) are below $100 million and do not meet our liquidity minimums.

VictoryShares U.S. Large Cap High Dividend Volatility Weighted Index ETF (CDL) is the top-rated Large Cap Growth ETF and Guinness Atkinson Global Innovators Fund (GINNX) is the top-rated Large Cap Growth mutual fund. CDL earns an Attractive rating and GINNX earns a Very Attractive rating.

Invesco Dynamic Large Cap Growth ETF (PWB) is the worst rated Large Cap Growth ETF and Quaker Strategic Growth Fund (QUAGX) is the worst rated Large Cap Growth mutual fund. PWB earns a Neutral rating and QUAGX earns a Very Unattractive rating.

The Danger Within

Buying a fund without analyzing its holdings is like buying a stock without analyzing its business and finances. Put another way, research on fund holdings is necessary due diligence because a fund’s performance is only as good as its holdings’ performance. Don’t just take our word for it, see what Barron’s says on this matter.

PERFORMANCE OF HOLDINGs = PERFORMANCE OF FUND

Analyzing each holding within funds is no small task. Our Robo-Analyst technology enables us to perform this diligence with scale and provide the research needed to fulfill the fiduciary duty of care. More of the biggest names in the financial industry (see At BlackRock, Machines Are Rising Over Managers to Pick Stocks) are now embracing technology to leverage machines in the investment research process. Technology may be the only solution to the dual mandate for research: cut costs and fulfill the fiduciary duty of care. Investors, clients, advisors and analysts deserve the latest in technology to get the diligence required to make prudent investment decisions.

Figures 3 and 4 show the rating landscape of all Large Cap Growth ETFs and mutual funds.

Figure 3: Separating the Best ETFs from the Worst Funds

Click to enlarge

Sources: New Constructs, LLC and company filings

Figure 4: Separating the Best Mutual Funds from the Worst Funds

Click to enlarge

Sources: New Constructs, LLC and company filings

This article originally published on July 19, 2018.

Disclosure: David Trainer, Kyle Guske II, and Sam McBride receive no compensation to write about any specific stock, style, or theme.

Follow us on Twitter, Facebook, LinkedIn, and StockTwits for real-time alerts on all our research.

[1] Harvard Business School features the powerful impact of our research automation technology in the case New Constructs: Disrupting Fundamental Analysis with Robo-Analysts.

[2] Ernst & Young’s recent white paper "Getting ROIC Right" proves the superiority of our holdings research and analytics.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not necessarily represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer.

Trending Articles

Huawei Says Carrier Business Stable as Revenues Decline: Jeff Kagan
Time To Reconsider Galapagos as New CEO Paul Stoffels Named
Global Politics Could Drive Extreme Market Volatility in 2022
Stock Stage Sharp Monday Afternoon Rally To Erase Morning Losses
Kroger App Causes Customer Frustration, Hurts Brand: Jeff Kagan
The Shipping Container Was the Most Important Invention of the 20th Century
Currencies and the Global Expansion of Money Supply

Market Movers

Sponsored Financial Content