This iShares Fund Combines High Growth Potential With Low Fees

Key Morningstar Metrics for iShares Russell 1000 Growth ETF

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

IShares Russell 1000 Growth ETF IWF charges a low fee and trades infrequently, which provides a cost advantage over its actively managed peers.

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.

The rules partially assign stocks with middling characteristics between the value and growth indexes. That could dilute the exchange-traded fund’s growth orientation. However, its portfolio aligns with the large-growth opportunity set. Growth metrics such as historical earnings growth and sales growth mirror those of the average fund in the large-growth Morningstar Category.

IShares Russell 1000 Growth’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.

Sector allocations are a reasonable approximation of the average fund, although a tilt toward technology stocks has persisted from 2020 through September 2025. Technology stocks, such as Nvidia NVDA, Microsoft MSFT, and Apple AAPL, occupied the top three holdings at the end of September 2025. They claimed 36% of the portfolio, while all technology stocks represented 54%.

IShares Russell 1000 Growth ETF has performed well when compared with its peers, despite a slow start. The fund’s launch coincided with the dot-com bubble’s peak, and when the bubble burst, IShares Russell 1000 Growth fell more than its peers, partly because it lacked a cash buffer. The fund’s performance later stabilized, and it has been strong in more recent periods.

iShares Russell 1000 Growth ETF: Performance Highlights

After its slow start, the ETF outperformed the average fund in the large-growth category by 1.26 percentage points annualized between its May 2000 inception and September 2025. IShares Russell 1000 Growth’s 8.39% annualized return during that period might look underwhelming, but its launch coincided with the peak of the dot-com bubble. The ETF’s 10-year performance tells a different story. It sports an 18.62% annualized return, eclipsing its average peer by 3.39 percentage points.

Performance was shaky from IShares Russell 1000 Growth’s inception in 2000 through 2007. The average large-growth fund lost 0.85%, but this ETF lost 2.61%. Since then, the fund has staged a comeback. It outperformed its average peer in 15 of the 17 annual periods from 2008 through 2024. The margin of defeat was less than 1 percentage point in the two years that IShares Russell 1000 Growth underperformed.

Technology stocks such as Nvidia, Apple, and Microsoft drove most of IShares Russell 1000 Growth’s performance over the past five years through September 2025. The fund’s average peer also benefited from robust technology stock holdings, but less so. IShares Russell 1000 Growth’s heftier allocation helped, and it managed to hold a higher-performing mix of technology stocks than its peers, on average.

This ETF sports a low fee with minimal turnover, reprieving it from the higher costs burdening active peers. Both should sharpen its competitive advantage.