MW This ETF plays defensively within growth stocks. Here's how it's faring better than the S&P 500.

By Christine Idzelis

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U.S. growth stocks have been broadly hammered this year as highflying Big Tech stocks have plunged, faring much worse than value equities.

But investors with an appetite for growth stocks can play defensively within the category by focusing more on high-quality stocks beyond the Big Tech names that have outsize weights in the S&P 500, according to Jennifer Grancio, head of exchange-traded funds at TCW.

The TCW Compounders ETF GRW, an actively managed fund that may invest in high-quality growth stocks globally, is so far holding up better in this year's stock-market slump than the S&P 500 SPX and Russell 1000 Growth Index RLG amid worries that tariffs may spell trouble for the economy.

The ETF has an "all-weather" portfolio concentrated in about 20 to 25 stocks, said Eli Horton, a senior portfolio manager at TCW. "It should outperform through the cycle," he said.

Despite worries about a slowdown and the uncertainty around tariffs, the U.S. economy so far remains on "solid footing" and the consumer is "generally fine," according to Horton. He said he's not yet seeing companies delay decisions on "big projects" or capital investments, because "the rules of the game are unknown."

Still, the broad U.S. market is selling off as the future appears uncertain, prompting investors to "fly" to safety and "pockets of certainty," he said.

The S&P 500 has tumbled around 7% this month, deepening its year-to-date losses to around 6% as of Thursday afternoon. Growth stocks have been particularly badly bruised, with the iShares Russell 1000 Growth ETF IWF - whose top holdings include Apple Inc. $(AAPL)$, Microsoft Corp. $(MSFT)$ and Nvidia Corp. $(NVDA)$ as of Wednesday - dropping a steep 10% so far in 2025 based on Thursday afternoon trading levels.

The TCW Compounders ETF was down 1.7% year to date over the same period, holding up better through the recent carnage.

"We don't really own Mag Seven," said Horton, who is the fund's portfolio manager and was referring to the closely related Big Tech stocks known as the Magnificent Seven.

While the ETF has a relatively small position in Microsoft, that's the only company in the Magnificent Seven that it owns, he said. The fund holds stocks in areas such as software, fintech, data services and high-quality industrials, according to Horton.

The portfolio of the TCW Compounders ETF is mostly U.S.-based, he said, adding that its top two holdings are Canada's Constellation Software Inc. (CA:CSU) and fintech business Fiserv Inc. $(FI)$.

Meanwhile, the U.S. stock market is stumbling after back-to-back strong years for the S&P 500.

While the Russell 1000 Growth index has broadly suffered, value equities have seen smaller losses in this year's slump. For example, the iShares Russell 1000 Value ETF IWD has fallen 1.1% year to date, according to FactSet data based on Thursday afternoon trading levels.

As usual, here's your look at the top- and bottom-performing ETFs over the past week through Wednesday, according to FactSet data.

The good ...

   Top performers                                                                                                                                                                 % performance 
   Global X Silver Miners ETF                                                                                                                                                     6.4 
   Amplify Junior Silver Miners ETF                                                                                                                                               3.9 
   iShares U.S. Oil & Gas Exploration & Production ETF                                                                                                                            3.4 
   abrdn Physical Platinum Shares ETF                                                                                                                                             2.5 
   Energy Select Sector SPDR Fund                                                                                                                                                 2.4 
   Source: FactSet data. Start date: March 5. End date: March 12. Excludes ETNs and leveraged products. Includes NYSE-, Nasdaq- and Cboe-traded ETFs of $500 million or greater. 

... and the bad

   Bottom performers                          % performance 
   YieldMax COIN Option Income Strategy ETF   -16.3 
   iShares Ethereum Trust ETF                 -16.0 
   Fidelity Ethereum Fund ETF                 -15.9 
   Grayscale Ethereum Mini Trust ETF          -15.9 
   Grayscale Ethereum Trust ETF               -15.9 
   Source: FactSet data 

New ETFs

BondBloxx and Income Research + Management announced on Thursday the launch of so-called tax-aware fixed-income ETFs, the BondBloxx IR+M Tax-Aware Intermediate Duration ETF TXXI and BondBloxx IR+M Tax-Aware ETF for Massachusetts Residents TAXM.

Weekly ETF reads

-- This hedge-fund style ETF is aimed at investors looking to diversify in volatile markets. Here's what to look for. (MarketWatch)

-- This five-star all-weather ETF can lower your exposure to risky stocks and bonds (MarketWatch)

-- Short-Term Bond ETFs Rake In Billions Amid Recession Alarm Bells (Bloomberg)

-- WisdomTree launches first European-only defence ETF (Financial Times)

-- Cathie Wood-Linked ETF Firm, Emerge Canada, Allegedly Violated Securities Law (Bloomberg)

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-Christine Idzelis

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March 13, 2025 16:08 ET (20:08 GMT)

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