(JKE) Morningstar Growth - Overview

The iShares Morningstar Growth ETF (NYSE ARCA:JKE) aims to replicate the Morningstar® US Large-Mid Cap Broad Growth Index®, which selects large- and mid-cap U.S. stocks that Morningstar’s proprietary methodology flags as having above-average growth characteristics. The fund is required to hold at least 90 % of its net assets in the index constituents or their depository receipts, making its performance tightly coupled to the index.

Key quantitative traits (as of the most recent quarterly report) include a weighted average market-cap of roughly $45 billion, a median price-to-earnings ratio near 27×, and a five-year annualized return of about 13 %-well above the S&P 500’s 10 % over the same horizon. The ETF’s sector tilt leans heavily toward technology (≈45 % of assets) and consumer discretionary (≈20 %), both of which are sensitive to discretionary spending trends and corporate-profit cycles.

Macro-level drivers that can materially affect JKE’s outlook are: (1) U.S. consumer confidence and personal income growth, which fuel demand for the high-growth products of its tech and consumer-discretionary holdings; (2) the Federal Reserve’s policy stance, because higher rates tend to compress valuations for growth-oriented stocks; and (3) corporate earnings momentum, especially in the software-as-a-service (SaaS) and e-commerce subsectors that dominate the index.

Given its non-diversified structure, concentration risk is a material consideration-top-10 holdings typically account for roughly 35 % of assets, so any significant price swing in a few mega-caps can materially swing the ETF’s net asset value.

For a deeper dive into how JKE’s factor exposures compare to alternative growth ETFs, you might explore ValueRay’s analytical tools, which can help you quantify the trade-off between growth tilt and risk metrics.