If you're interested in broad exposure to the Small Cap Growth segment of the US equity market, look no further than the iShares Morningstar Small-Cap Growth ETF (ISCG Quick QuoteISCG - Free Report) , a passively managed exchange traded fund launched on June 28, 2004.

The fund is sponsored by Blackrock. It has amassed assets over $817.88 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 Growth

Sitting at a market capitalization below $2 billion, small cap companies tend to be high-potential stocks compared to its large and mid cap counterparts, but come with higher risk.

While growth stocks do boast higher than average sales and earnings growth rates, and they are expected to grow faster than the wider market, investors should note these kinds of stocks have higher valuations. Something to keep in mind is the higher level of volatility that is affiliated with growth stocks. 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

Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive counterparts if all other fundamentals are 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 0.78%.

Sector Exposure and Top Holdings

It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. 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 27.6% of the portfolio. Information Technology and Healthcare round out the top three.

Looking at individual holdings, Ciena Corp (CIEN) accounts for about 1.06% of total assets, followed by Bloom Energy Class A Corp (BE) and Coherent Corp (COHR).

The top 10 holdings account for about 8% of total assets under management.

Performance and Risk

ISCG 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 15.03% so far this year and is up roughly 8.68% in the last one year (as of 12/15/2025). In the past 52-week period, it has traded between $39.44 and $57.78.

The ETF has a beta of 1.11 and standard deviation of 20.38% for the trailing three-year period. With about 942 holdings, it effectively diversifies company-specific risk.

Alternatives

iShares 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 an excellent 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 $13.58 billion in assets, Vanguard Small-Cap Growth ETF has $21.00 billion. IWO has an expense ratio of 0.24% and VBK charges 0.07%.

Bottom-Line

While 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.