Should iShares Morningstar Small-Cap Growth ETF (ISCG) Be on Your Investing Radar?

Designed to provide broad exposure to the Small Cap Growth segment of the US equity market, the iShares Morningstar Small-Cap Growth ETF (ISCG) is a passively managed exchange traded fund launched on 06/28/2004.The fund is sponsored by Blackrock. It has amassed assets over $666.51 million, making it one of the average sized ETFs attempting to match the Small Cap Growth segment of the US equity market.Why Small Cap GrowthSmall cap companies have market capitalization below $2 billion. They usually have higher potential than large and mid cap companies with stocks but higher risk.Growth stocks have higher than average sales and earnings growth rates. While these are expected to grow faster than the broader market, they also have higher valuations. Further, growth stocks have a higher level of volatility associated with them. Compared to value stocks, growth stocks are a safer bet in a strong bull market, but don't perform as strongly in almost all other financial environments.CostsInvestors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.Annual operating expenses for this ETF are 0.06%, making it the least expensive products in the space.It has a 12-month trailing dividend yield of 0.81%.Sector Exposure and Top HoldingsEven though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.This ETF has heaviest allocation to the Industrials sector--about 22.50% of the portfolio. Information Technology and Healthcare round out the top three.Looking at individual holdings, Sofi Technologies Inc (SOFI) accounts for about 0.61% of total assets, followed by Affirm Holdings Inc Class A (AFRM) and Insmed Inc (INSM).The top 10 holdings account for about 4.89% of total assets under management.Performance and RiskISCG seeks to match the performance of the MORNINGSTAR US SML CP BRD GRWTH EXTD ID before fees and expenses. The Morningstar US Small Cap Broad Growth Extended Index comprises of small-capitalization U.S. equities that exhibit growth characteristics.The ETF has added about 3.88% so far this year and is up roughly 19.67% in the last one year (as of 02/05/2025). In the past 52-week period, it has traded between $42.78 and $54.11.The ETF has a beta of 1.10 and standard deviation of 23.24% for the trailing three-year period. With about 982 holdings, it effectively diversifies company-specific risk.AlternativesIShares Morningstar Small-Cap Growth ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, ISCG is a great option for investors seeking exposure to the Style Box - Small Cap Growth segment of the market. There are other additional ETFs in the space that investors could consider as well.The iShares Russell 2000 Growth ETF (IWO) and the Vanguard Small-Cap Growth ETF (VBK) track a similar index. While iShares Russell 2000 Growth ETF has $12.76 billion in assets, Vanguard Small-Cap Growth ETF has $20.33 billion. IWO has an expense ratio of 0.24% and VBK charges 0.07%.Bottom-LineWhile an excellent vehicle for long term investors, passively managed ETFs are a popular choice among institutional and retail investors due to their low costs, transparency, flexibility, and tax efficiency.To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.Want key ETF info delivered straight to your inbox?Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week.Get it free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report iShares Morningstar Small-Cap Growth ETF (ISCG): ETF Research Reports Insmed, Inc. (INSM): Free Stock Analysis Report iShares Russell 2000 Growth ETF (IWO): ETF Research Reports Vanguard Small-Cap Growth ETF (VBK): ETF Research Reports Affirm Holdings, Inc. (AFRM): Free Stock Analysis Report SoFi Technologies, Inc. (SOFI): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks