Zacks Focus Growth ETF (GROZ) seeks to track growth-oriented U.S. companies selected using Zacks' proprietary screening methodology, which identifies stocks with strong earnings growth potential, positive earnings estimate revisions, and favorable momentum indicators. This actively managed growth equity ETF focuses on companies demonstrating accelerating fundamental performance.
How It Works
GROZ employs an active management approach using Zacks' quantitative research platform to identify growth stocks with superior earnings prospects. The fund screens for companies showing positive earnings estimate revisions, strong earnings surprise history, and favorable Zacks Rank scores. Portfolio construction emphasizes conviction-weighted positions rather than market-cap weighting, with quarterly rebalancing to capture evolving growth opportunities. Holdings typically range from 30-50 concentrated positions across various market capitalizations.
Key Features
- Leverages Zacks' 50+ year track record in earnings estimate analysis and proprietary ranking system for stock selection
- Concentrated portfolio approach allows for higher conviction positions in top-ranked growth opportunities versus broad diversification
- Zero expense ratio structure makes it one of the most cost-effective actively managed growth ETFs available
Risks
- This ETF can lose significant value during growth stock selloffs when investors rotate to value stocks, potentially declining 40-50% in severe market corrections
- Concentrated portfolio of 30-50 holdings creates higher individual stock risk compared to diversified growth funds with hundreds of positions
- Active management and growth focus expose investors to style risk when growth strategies underperform value or defensive approaches for extended periods
Who Should Own This
Best suited for aggressive growth investors with 3-7 year time horizons and high risk tolerance willing to accept significant volatility for potential outperformance. Works as a satellite holding representing 10-25% of equity allocation for investors seeking concentrated exposure to high-conviction growth opportunities beyond broad market index funds.