WisdomTree launches US quality growth ETF | ETF Strategy

WisdomTree launches US quality growth ETF

Jan 5th, 2023 |
By James Lord, CFA |
Category: Equities

WisdomTree has launched a new US large-cap equity ETF targeting companies with robust quality and growth characteristics.

WisdomTree launches large-cap growth ETF

The ETF is designed to provide US large-cap growth exposure while avoiding companies with the worst profitability metrics.

The WisdomTree US Quality Growth Fund (QGRW US) has been listed on NYSE Arca with an expense ratio of 0.28%.

Designed for investors seeking a high-conviction growth allocation that emphasizes profitability, the fund is linked to the proprietary WisdomTree US Quality Growth Index.

The index ranks the 500 largest US-listed companies based on a composite score of two equally weighted fundamental factors: growth and quality.

The growth factor is determined by a company’s median analyst earnings growth forecast, its trailing five-year EBITDA growth, and its trailing five-year sales growth. The quality factor, meanwhile, is determined by a company’s trailing three-year average return on equity and trailing three-year average return on assets.

The 100 companies with the highest composite scores are selected and weighted by market capitalization.

As of the end of December, stocks classified to the software & services sector accounted for over a quarter (27.6%) of the index weight with the next-largest sector exposures being technology hardware & equipment (13.5%), media & entertainment (12.2%), retailing (10.4%), semiconductors & semiconductor equipment (9.2%), and health care equipment & services (7.3%).

Notable positions included Apple (12.3%), Microsoft (11.1%), Alphabet (7.1%), Amazon.com (5.3%), UnitedHealth Group (4.8%), and Visa (4.2%).

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