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Should iShares Morningstar Mid-Cap Growth ETF (IMCG) Be on Your Investing Radar?
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Designed to provide broad exposure to the Mid Cap Growth segment of the US equity market, the iShares Morningstar Mid-Cap Growth ETF (IMCG - Free Report) is a passively managed exchange traded fund launched on 06/28/2004.
The fund is sponsored by Blackrock. It has amassed assets over $2.58 billion, making it one of the average sized ETFs attempting to match the Mid Cap Growth segment of the US equity market.
Why Mid Cap Growth
Compared to large and small cap companies, mid cap businesses tend to have higher growth prospects and are less volatile, respectively, with market capitalization between $2 billion and $10 billion. These types of companies, then, have a good balance of stability and growth potential.
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. They are likely to outperform value stocks in strong bull markets but over the longer-term, value stocks have delivered better returns than growth stocks in almost all markets.
Costs
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
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 0.75%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Industrials sector--about 25% of the portfolio. Information Technology and Consumer Discretionary round out the top three.
Looking at individual holdings, Palantir Technologies Inc Class A (PLTR - Free Report) accounts for about 1.83% of total assets, followed by Autodesk Inc (ADSK - Free Report) and Hilton Worldwide Holdings Inc (HLT - Free Report) .
The top 10 holdings account for about 10.39% of total assets under management.
Performance and Risk
IMCG seeks to match the performance of the MORNINGSTAR US MID CAP BROAD GROWTH INDX before fees and expenses. The Morningstar US Mid Cap Broad Growth Index comprises of mid-capitalization U.S. equities that exhibit growth characteristics.
The ETF has added about 25.70% so far this year and is up about 36.55% in the last one year (as of 11/26/2024). In the past 52-week period, it has traded between $59.20 and $80.59.
The ETF has a beta of 1.08 and standard deviation of 21.29% for the trailing three-year period. With about 306 holdings, it effectively diversifies company-specific risk.
Alternatives
IShares Morningstar Mid-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, IMCG is an outstanding option for investors seeking exposure to the Style Box - Mid Cap Growth segment of the market. There are other additional ETFs in the space that investors could consider as well.
The Vanguard Mid-Cap Growth ETF (VOT - Free Report) and the iShares Russell Mid-Cap Growth ETF (IWP - Free Report) track a similar index. While Vanguard Mid-Cap Growth ETF has $15.91 billion in assets, iShares Russell Mid-Cap Growth ETF has $18.31 billion. VOT has an expense ratio of 0.07% and IWP charges 0.23%.
Bottom-Line
Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds are also excellent vehicles for long term investors.
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.
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Should iShares Morningstar Mid-Cap Growth ETF (IMCG) Be on Your Investing Radar?
Designed to provide broad exposure to the Mid Cap Growth segment of the US equity market, the iShares Morningstar Mid-Cap Growth ETF (IMCG - Free Report) is a passively managed exchange traded fund launched on 06/28/2004.
The fund is sponsored by Blackrock. It has amassed assets over $2.58 billion, making it one of the average sized ETFs attempting to match the Mid Cap Growth segment of the US equity market.
Why Mid Cap Growth
Compared to large and small cap companies, mid cap businesses tend to have higher growth prospects and are less volatile, respectively, with market capitalization between $2 billion and $10 billion. These types of companies, then, have a good balance of stability and growth potential.
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. They are likely to outperform value stocks in strong bull markets but over the longer-term, value stocks have delivered better returns than growth stocks in almost all markets.
Costs
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
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 0.75%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Industrials sector--about 25% of the portfolio. Information Technology and Consumer Discretionary round out the top three.
Looking at individual holdings, Palantir Technologies Inc Class A (PLTR - Free Report) accounts for about 1.83% of total assets, followed by Autodesk Inc (ADSK - Free Report) and Hilton Worldwide Holdings Inc (HLT - Free Report) .
The top 10 holdings account for about 10.39% of total assets under management.
Performance and Risk
IMCG seeks to match the performance of the MORNINGSTAR US MID CAP BROAD GROWTH INDX before fees and expenses. The Morningstar US Mid Cap Broad Growth Index comprises of mid-capitalization U.S. equities that exhibit growth characteristics.
The ETF has added about 25.70% so far this year and is up about 36.55% in the last one year (as of 11/26/2024). In the past 52-week period, it has traded between $59.20 and $80.59.
The ETF has a beta of 1.08 and standard deviation of 21.29% for the trailing three-year period. With about 306 holdings, it effectively diversifies company-specific risk.
Alternatives
IShares Morningstar Mid-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, IMCG is an outstanding option for investors seeking exposure to the Style Box - Mid Cap Growth segment of the market. There are other additional ETFs in the space that investors could consider as well.
The Vanguard Mid-Cap Growth ETF (VOT - Free Report) and the iShares Russell Mid-Cap Growth ETF (IWP - Free Report) track a similar index. While Vanguard Mid-Cap Growth ETF has $15.91 billion in assets, iShares Russell Mid-Cap Growth ETF has $18.31 billion. VOT has an expense ratio of 0.07% and IWP charges 0.23%.
Bottom-Line
Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds are also excellent vehicles for long term investors.
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.