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  5. IWO: I have a RESP for my son with equal weighting of IWO and VGRO. [iShares Russell 2000 Growth ETF]
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Investment Q&A

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Q: I have a RESP for my son with equal weighting of IWO and VGRO. With money to deploy I was thinking of splitting it between these two ETFs. Any concerns with that approach?
Asked by Gregory on November 08, 2023
5i Research Answer:

IWO is a small-cap ETF with Net Assets of approximately $9.9B, Expense ratio of 0.24%, and 5.15% total return since inception. IWO is attractive due to its focus on small caps which we believe are due for a turnaround, with valuations in 2022 approaching 2008 levels. VGRO has an AUM of $4.09B, MER of 0.24%, and 5.2% return since inception while maintaining an 80/20 split between equity and fixed income securities. VGRO primarily invests in large cap companies which comprise  77.17% of holdings. The bond component of VGRO has negatively impacted the Fund performance this year. We view IWO as more attractive of the two due to the small-cap focus, especially when considering a longer-term time horizon. VGRO is a good ETF and will provide diversification from the small-cap focus of IWO. So, we think a combo would work fairly well.