ThinkPanmure

About the ThinkGrowth Index

The ThinkGrowth Index tracks the 300 fastest growing companies in the U.S., with a market capitalization greater than $200 million. The goal of the ThinkGrowth Index is to provide an accurate barometer for investors that are focused on the growth sectors of the economy.

While many indices contain growth stocks, none provides a pure perspective of growth stocks. As a consequence, growth sector performance and investor sentiment toward growth stocks largely goes underrepresented in U.S. capital markets. This represents a void in the market for growth investors which we feel the ThinkGrowth Index successfully fills.

The ThinkGrowth Index is a market capitalization weighted index, which we believe best mimics the performance of growth portfolios. One adjustment that is made to the index is to initially "cap" the portfolio weight of larger growth companies so that no company accounts for more than 1.0% of the total index. This effectively reduces the bias of the index from being overly influenced by the "bellwethers" and provides a more accurate barometer of the entire growth universe.

The index constituents are determined by their mean estimated long-term growth rate, as provided by First Call. Unlike other indices where the constituents are determined by company size, industry classification, which exchange they are traded on, or by a committee, the ThinkGrowth Index is the only known index basing inclusion on an objective measure — the long-term projected growth rate.

In order to create an index that is tied to the realities of asset managers, we require a few hurdles to be achieved which we believe improves the investable quality of the index: (1) An initial share price above $5 (2) a minimum of two analysts contributing earnings estimates for the current and next fiscal year.

The index is re-constituted once a year based on June 30th closing prices. Performance and valuation statistics for the total index and sub-indices are published each week as part of ThinkThoughts.


ThinkGrowth Index vs. the Market

 


ThinkGrowth Index by Market Cap

 


ThinkGrowth Index by Sector

ThinkGrowth Index Expected Long-term Growth