In the latest episode of ETF 360, VettaFi Senior Industry Analyst Kristen Chang spoke to Winslow Capital Managing Director Barry Peters about their new active growth funds, the NYLI Winslow Focused Large Cap Growth ETF (IWFG ) and the NYLI Winslow Large Cap Growth ETF (IWLG ).
2 Takes on Active Active Growth
According to Chang, New York Life Investments teamed up with Winslow Capital Management to create these actively managed large-cap growth products.
“Both strategies provide actively managed exposure to the large-cap growth asset class,” Peters said. “The big difference between the two strategies is their level of diversification.” IWLG is the more diverse fund. Accordingly, it holds between 40 and 50 companies. By comparison, the more concentrated IWFG holds closer to 30 companies.
An Active Growth Advantage
Peters sees the primary advantage of both strategies residing in their active management structure: “Large-cap growth indices today have never been more concentrated than they are currently.”
He also sees rapid innovation as creating an opportunity for active managers, who can react in real time. Winslow’s funds are also uniquely positioned within large-cap growth. Accordingly, they have no preferred habit to growth investing. Peters noted that they diversify across consistent growth, dynamic growth, and cyclical growth.
Growth Still Has Its Groove
Given the dominance of the Magnificent Seven and many investors pivoting to small-cap value, Chang asked , why large-cap growth now? Peters responded, “We think large-cap growth is an advantaged asset class, very simply put, due to its superior earnings growth. That’s an advantage that compounds over time.” He compared it to why people invest in equities to begin with. The compounding growth creates better results over the long term.
“Another advantage is the profit margin gap,” Peters added. “Large-cap growth as an asset class turns every dollar of top-line revenue into a greater bottom line profit versus other asset classes.”
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