A Low-Cost Way to Own US Large-Cap Growth

Key Morningstar Metrics for iShares Russell 1000 Growth ETF IWF

• Morningstar Medalist Rating
  : Gold
• Process Pillar
  : Above Average
• People Pillar
  : Above Average
• Parent Pillar
  : Above Average

IShares Russell 1000 Growth ETF accurately represents the large-growth segment of the US stock market, allowing its low fee and efficient portfolio to carve out a long-term edge.

The fund tracks the Russell 1000 Growth Index, which targets the faster-growing half of the large- and mid-cap segments of the market. It starts with stocks in the Russell 1000 Index—a composite of the largest 1,000 US stocks by market capitalization—and assigns a style score based on three fundamental metrics. It holds the half that exhibits growthlike characteristics, or those with high projected earnings growth and high historical sales per share growth. Stocks with middling characteristics may be part of both value and growth indexes.

Assigning position sizes based on a stock’s market cap is a simple and efficient method to weight the portfolio. Since US stocks are highly traded, they quickly reflect new information, and carving an edge is difficult. Market-cap weighting naturally adjusts to price changes without frequent rebalancing, generating lower trading costs. That, and lower fees, give large-growth index funds a long-term performance advantage over most actively managed peers.

The fund’s focus on companies with strong growth characteristics leaves it vulnerable to growth traps: high-priced stocks that fall short of their lofty projections. Market-cap weighting exacerbates the risk by pouring more into those stocks than may be justified. However, market consensus has priced stocks well in the long run.

The fund holds a broad, well-diversified portfolio. It typically includes around 390 stocks, and the top 10 represented around 60% of the portfolio at the end of April 2026. Still, market-cap weighting can contribute to portfolio concentration when a few stocks dominate the market. This has been the case lately with a handful of mega-cap technology stocks growing to prominence and commanding a greater share of the portfolio.

When a few richly valued companies or sectors power most of the market gains, market-cap weighting may overexpose the strategy to the fluctuations of one stock or sector. But this is not a fault in design, as it simply reflects the market’s composition. Its low turnover, low fee, and broad diversification across the growth market mitigate these risks.

iShares Russell 1000 Growth ETF: Performance Highlights

The Russell 1000 Growth Index returned 18.3% annualized over the past 10 years through April 2026. The ETF captured nearly all its performance during that period, owing to a low fee and minimal trading costs. Its 18.1% return outperformed the large-blend average by 2.9 percentage points annualized, over the same period. The ETF also engages in securities lending, which allows it to earn back a portion of its fee, slightly improving investor returns.

The strategy’s performance closely follows the ups and downs of the growth segment in the US stock market, since it is always fully invested. All else equal, this strategy should outperform category peers that hold cash during market rallies, holding back returns. But no cash buffer also means that the strategy may lag similar peers when the market falls.

Investors should expect meaningful fluctuations in performance over shorter periods because of the index’s dependence on the market’s largest growth stocks. In its 45-plus-year history, the Russell 1000 Growth Index has registered a negative annual return about 20% of the time—less often than its average US large-growth peer. And it declined only twice over any rolling 10-year window.

Technology stocks, such as Nvidia NVDA, Apple AAPL, and Microsoft MSFT, drove most of this fund’s performance over the five years through April 2026. The fund’s average peer also benefited from robust tech stock holdings, but less so. The fund’s heftier allocation helped, and it managed to hold a higher-performing mix of technology stocks than its peers, on average.